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I 




• 



0^ 



Elementary Treatises on all the Principal Subjects of the Law 



A he special features of these t>ooks are as follows: 

1. A succinct statement of leading principles In black-letter type. 

2. A more extended commentary, elucidating the principles. 
8. Notes and authorities. 

Published in regular octavo form, and bound In buclcram. 



Black on Bankruptcy. 

Black on Construction and Interpretation of Laws (3d Ed.). 

Black on Constitutional Law (8d Ed.). 

Black on Judicial Precedents. 

Bogert on Trusts. 

Burdick on Real Property. 

Chapin on Torts. 

Childs on Suretyship and Guaranty. 

Clark on Contracts (3d Ed.). 

Clark on Criminal Law (3d Ed.). 

Clark on Criminal Procedure {16 Kd.). 

Clark on Private Corporations (3d Ed.). 

Cooley Ob Municipal Corporations. 

Costigan on American Mining Law. 

Croswell on Executors and Administrators. 

Dobie on Bailments and Carriers. 

E^ton on Equity Jurisprudence (2d Ed.). 

Gardner on Wills (2d Ed.). 

Gilmore on Partnership. 

Hale on Damages (2d Ed.). 

Hughes on Admiralty (2d Ed.). 

Hughes on Federal Jurisdiction and Procedure (2d. Ed.). 

McKelvey on Evidence (3d £id.). 

Norton on Bills and Notes (4th Ed.). 

Shipman on Common-Law Plending (3d Ed.). 

Shipman on Equity Pleading. 

Smith's Elementary Law. 

Tiffany on Agency. 

Tiffany on Banks and Banking. 

TifTany on Persons and Domestic Relations (3d Ed.). 

Tiffany on Sales (2d Ed.). 

Vance on Insurance. 

Wilson on International Law. 

Hornbooks on the law of other subjects will be published from 
time to time. 



Piiblialied and for sale by 
WEST PUBLISHIKO CO., 8T. PAUL, MINN. 



J 



C11517— k 



HANDBOOK 



OF THB 



LAW OF CONTRACTS 



BY WM. L. CLARK, JR. 

I 

author op clark 's handbook of crntlmal law. 
Clark's handbook op oorpokations, btc., btc. 



THIRD EDITION 
BY ARCHIBALD H. THROCKMORTON 

PROFBSSOR OP LAW. INDIANA UNIVBRSITY 



ST. PAUL 

WEST PUBLISHING CO, 

1914 



GOPTBIOHT, 18H 
BT 

WEST PUBLISHING COMPANY 



COFYBIOHT, 1904 
BT 

WEST PUBLISHING COMPANY 



COPTBIOHT, 1914 
BT 

WEST PUBLISHING COMPANY 

(CliABK CONT^D Ed.) 



PREFACE TO THE THIRD EDITION 



The object of the editor in preparing this edition of Mr. Clark's 
work has been to make a careful revision of both text and notes. 
In the text, a few changes have been mad^, as, for example, in 
the passages treating of offers under seal, consideration, and re- 
leases. Numerous additions have also been made, the most im- 
portant of which have been for the purpose of a more adequate 
treatment of subjects of recent development, such as contracts 
in restraint of trade or tending to the establishment of monopoly. 
The notes have been expanded, and have been increased in number 
to the extent of about twenty per cent. In all, about one thousand 
new cases have been cited. These consist principally of cases 
decided since the publication of the second edition, and have been 
selected) not for their cumulative effect, but because they support 
new text, or contain statements of new principles or valuable dis- 
cussions of old ones. Cases the names of which are printed in 
bold type are those found in Throckmorton's Cases on Contracts, 
which was prepared especially for use with this work. Appended 
to the notes are citations to the sections of the Century Digest 
and the Decennial Digest (Key-No.), where may be found ex- 
haustive collections of cases in point. The chapter on Agency has 
been omitted, as that topic is now the subject of a separate course 
in practically all law schools. It has been thought wise, however, 
to retain the chapter on Quasi Contracts, principally for the ben- 
efit of the large number of schools which, as yet, have no separate 
course in that subject. 

BLooMiNOTOir, Ind., January 24, 1914. /^, H, X. 



PREFACE TO THE SECOND EDITION 



In preparing the present edition the editor has had the benefit 
of suggestions made by many instructors who have used Mr. 
Clark's book in the classroom. Some new matter has been added, 
which has led to the condensation of portions of the original text ; 
and some cases formerlv cited have been omitted to make room 
for more recent cases, but the editor has endeavored to retain all 

(▼) 



VI PREFACa TO THE SECOND EDITION 

leading cases cited by Mr. Clark. The chapters on Agency and 
Quasi Contracts, although perhaps somewhat beyond the scope 
of an elementary book on Contracts, have been retained with little 
change, for the benefit of schools which do not make these topics 
the subjects of separate courses. 

The publishers have adopted the device of printing in bold type 
the names of cases cited in the notes which are found in certain 
of the collections of leading cases. The cases so printed are to 
be found in Hopkins' Cases on Contracts, Langdell & Williston's 
Cases on Contracts, Williston's Cases on Contracts, Huffcut & 
Woodruff's American Cases on Contracts, Keener's Cases on Con- 
tracts, and Keener's Cases on Quasi Contracts. 

St. Paul, June S, 1904. Francis B. Tiffan\ . 



PREFACE TO THE FIRST EDITION 



In preparing this work the object has been to present the gen- 
eral principles of the law of contract clearly and concisely, with 
proper explanations and illustrations, — not to make a digest. 
There has been no attempt to be original for the mere sake of 
originality. Statements of rules have been freely taken from recog- 
nized audiorities. So much use has been made of Sir William An- 
son's and Mr. Leake's works, that acknowledgment has not always 
been made in the notes. A general acknowledgment is therefore 
made here. Where matter has been obtained from other sources 
it has been duly acknowledged. 

Nearly 10,000 cases have been cited. Every one of them has 
been personally examined, and is cited because in point, — ^not be- 
cause it has been cited by some other writer, or in some other 
case, or because it is found in the digests. A few cases have been 
cited for their valuable dicta, or because they collect and discuss 
the cases, but in most instances the cited case will be found to 
embody an actual decision directly in point. Where a number of 
decisions have been cited to the same point, the leading cases and 
those best illustrative of the principle involved have been cited first. 

St. Paul, Minn., November 15, 1894. \V. L. C, Jr. 



TABLE OF CONTENTS 



CHAPTER I 

DEFINITION, NATURE, AND REQUISITES OF CONTRACT IN GENERAL 

6eetl<» Page 

1-2. GoDtract Defined 1-2 

3. Afreement 3-5 

4. ObUgaUon &-7 

fi. Concurrence of Agreement and Obligation • 7-11 

6. PromiM 11-12 

7-«. "Void,- •-Voidable," and "Unenforceable" Agreements 12-13 

la Bflsentials of Contract •> 14 



CHAPTER II 

OFFER AND ACCEPTANCE 

11-18. In General 15-17 

14-15. Commonication by Condnct— Implied Contracts 18-22 

16. Communication of Offer 22-25 

17. Neoesflity and Effect of Acceptance • • 25-26 

18-20. Commnidcation of Acceptance • . 27-84 

21. Character, Mode, Place, and Time of Acceptance 84-39 

22-23. Revocation of Offer 39-44 

24. Lapee of Offer 44-46 

25. Offers to the' Public GeneraUy 47-50 

2& Offer at Referring to Legal Relations 50-^57 



CHAPTER III 

CLASSIFICATION OF CONTRACTS-CONTRACTS UNDER SEAL AND 

CONTRACTS OF RECORD 

27. Classification of Contracts 58-60 

28. Contracts of Record 60-62 

29. Contracts Under Seal 62-63 

80-32. How Contracto Under Seal are Made 63-69 

33. Characteristics of Contract Under Seal 69-74 

84. Necessity for Contract Under Seal 74-75 



CHAPTER IV 

CONTRACTS REQUIRED TO BE IN WRITIXG— STATUTE OF FRAUDS 

S5-36w In General of Requirement of Writing 76-7S 

37. SUtute of Frauds— In General 78-80 

88. Contracts within Section 4 80 

CLiABX Cort.(3d Eo.) (vii) 



Vlll 



TABLB OF CONTENTS 



Section 

39. Promise by Executor or Administrator • SI 

40l Promise to Answer for Debt, Default, or Miscarriage 

of Another .- 81-W 

41. Agreement in Consideration of Marriage 89-80 

42. Contract or Sale of Lands 91-95 

43. Agreement Not to be Performed within One Year 95-101 

44-i9. Form Required 101-113 

50-51. Effect of Noncompliance ; 134-121 

52-^5, Oontracts within Section 17 -»••. ^««».,.« 121-126 

56L Acceptance and Receipt 127-130 

57-5a Earnest and Part Payment i 130-131 

59. Form Required; 181-132 

ea Effect of Noncompliance 132 



CHAPTER V 

CONSIDERATION 

• 

61-62. Consideration Defined ^^ tS&-137 

63-64. Necessity for Consideration, and Presumption 137-140 

65-66. Adequacy of Consideration 140-144 

67. Sufficiency or Reality of Consideration 144-145 

68-70. Mutual Promises -Mutuality 145-150 

71-73. Forbearance to Exercise a Right 150-156 

74-7a Doing What One is Bound to Do 156-166 

77-78» Impossible and Vague Promises 166-168 

79. Legality of Consideration 168 

80. Consideration in Respect of Time— Past Consideration 169-176 



CHAPTER VI 



81. 

82-83. 

84. 

85-^a 

89. 

90. 

91-94. 

95-97. 

9& 

99-101. 

102-104. 

105-107. 

loa 

109. 
IIO-IIL 
112-114. 
115-116. 

117. 

11»-121. 

122-123. 

^ 124. 

125-12a 



CAPACITY OF PARTIES 

In General 178 

Political Status— SUtes and United States 17^-180 

Foreign States and Sovereigns ' 181 

Aliens 181-183 

Convicts 183-184 

Professional SUtus 184-185 

Infants— In General 185-192 

Liability for Necessaries 192-199 

Ratification and Avoidance 200-202 

Who may Avoid Contract 202-203 

Time of Avoidance 204-207 

What Amounts to Ratification 207-211 

What Amounts to Disaffirmance 211-212 

Extent of Ratification or Disaffirmance 212-213 

Return of Consideration .' 213-217 

Effect of Ratification and Disaffirmance 218-219 

Torts in Connection with Contracts 220-223 

Insane Persons— In General 223-230 

Ratification and Avoidance 231-233 

Drunken Persons. 233-235 

Married Women 236-240 

Corporations 240-243 



TABLB OF CONTBNT8 



CHAPTER VII 



BBALITY or CONSENT 

BectlAB Page 

129. In General 244-245 

130-131. Mistake .• 245-257 

132-134. Effect— Remedies 257-258 

135-138. Misrepresentation 259-271 

139. Fraud 272-290 

140-141. Effect— Remedies 290-297 

142-144. Duress 297-305 

145-140. Undue Influence 805-313 



CHAPTER VIII 

LEGALITY OF OBJECT 

147. In General 314-315 

148. Classification of Unlawful Agreements 315 

149. Agreements in Violation of Positive Law 315-316 

150. Breach of Rules of Common Law 316-320 

151. Breach of Statute— Constitutional Law 820-321 

152.- Prohibition by Statute 321-324 

153. Particular Agreements in Breach of Statute 324-348 

154-155. Agreements Contrary to Public Policy 348-350 

156. Agreements Tending to Injure the Public Service 350-362 

157. Nonofficial Corruption 362-363 

158-160. Perversion or Obstruction of Justice 364-369 

161. Encouragement of Litigation — Champerty and Maintenance 370-376 

162. Agreements of Immoral Tendency 376-377 

163. Agreements Tending to Fraud and Breach of Trust 378-380 

164. Agreements in Derogation of the Marriage Relation 380-384 

165. Agreements in Derogation of Parental Relation 384 

166-169. Agreements in Restraint of Trade 384-393 

170-172. Unlawful Combinations— Monopolies, Trusts, etc 393-401 

173-174. Exemption from Liability for Negligence 401-405 

175. Effect of Illegality— Agreements Partly Illegal 405-410 

176-177. Object Unlawful but Intention Innocent 410-412 

178-180. ' Object Innocent but Intention Unlawful 412-418 

181. Promises to Pay Money Due on Illegal Transactions 418-422 

182-185. Relief of Party to Unlawful Agreement 423-432 

186. Conflict of Laws— In Space 432-437 

187. In Time 432-437 



CHAPTER IX 



OPERATION OP CONTRACT 



188. Limits of Contractual Relation— In General 438-440 

189-190. Imposing Liability on Third Persons 440-441 

191-192. Conferring Rights on Third .Persons ^ 442-452 

193. Assignment of Contracts— In General - 452 

194. Assignment of Liabilities by Act of Parties 453-454 

195-197. Assignment of RighU by Act of ParUes 454-467 



X TABLB OF CONTENTS 

Section Pag« 

198. Anignment bj Operation of Law 4t>7 

.199. On Transfer of Interests in Land 467-472 

200. On Marriage 472-473 

201. On Death 47^-474 

202. Joint and Several Contracta— In General 475 

203-204. Joint Contracts 475-479 

205-206. Several Contracts 4T9-480 

207. Contracts both Joint and Several 4S0-481 

20a Contribution between Joint Debtors 481-482 



CHAPTER X 

INTERPRETATION OF CONTRACT 

209-218. Roles Relating to Evidence— In General— Parol Evidence. ..•• 483-485 

214-215. Proof of Document 486-487 

216. Evidence as to Fact of Agreement 488-490 

217. Evidence as to Terms of Contract 400-501 

218-220. Rules of ConstructionMSeneral Rules 501-511 

221. Rules as to Time 512-514 

222-223. Rules as to Penalties and Liquidated Damages 515-519 

224. Joint and Several Contracta 519-521 



CHAPTER XI 

DISCHARGE OF CONTRACT 

225. In General 522-523 

226-227. By Agreement— In General 523 

228-232. Waiver, Cancellation, or Rescission 523-526 

233-234. Substituted Contract 526-531 

235. Form of Discbarge by New Agreement 531-^4 

236. Conditions Subsequent 534r-538 

237. By Performance— In General 539-543 

23a Payment 544-552 

239. Tender 552-556 

240-241. By Breach— In General ♦ 556-557 

242. Forms of Discharge by Breach 557 

243-244. Renunciation of Contract 557-562 

245. Impossibility Created by Party 562-564 

246. Breach by Failure of Performance 564-565 

247-248. Independent Promises 565-574 

249-253. Conditional Promises 575-590 

254. By Impossibility of Performance 590-598 

255. By Operation of Law 599 

256. Merger 599-600 

257. Alteration of Written Instrument 600-606 

258. Proceedings in Bankruptcy 606 

259. Remedies on Breach of Contract 606-607 

260-263. Damages C08-611 

264. Specific Performance 611-614 

' 265. Discharge of Right of Action 614 

266. By the Consent of the Parties 614-617 

267. By Judgment 617-619 

268-260. By Lapse of Time 619-622 



TABLB OF CONTBNT8 



CHAPTER XII 

QUASI CONTRACT 
flecttoD Page 

270. In General 623-627 

271. Money Paid for the Use of Another 627-630 

272. Money Rec^yed for the Use of Another ••• 630-^3 

273. Beooreiy for Beneflta Conferred ••••• 644-651 



TABLE OF CASES CITED 

(Page 653) 



INDKX 
(Pa«t 786) 



V 



L 




TKis volume contains 
Key- Number Annotations 



TliAt IB to say, lor ev«ry pdnt at law wluck is itmtej or 
<]i8c\]8Be<l in tbo text, and in Buftj^ort of wlucb oases are 
cited, tkere is added to tlie autkor's note a eitation to the 
Key-Number section or sections in the Decennial Digest 
or in the Key-Number Series, under which all cases di- 
rectly involving that fioint have been digested. A similar 
eitation to the Century Digest is given, except where the 
t>rincif>Ie involved is one on which no ease law existed 
l>rior to 1897. 



Clark Coxtt.CSd Bd.) 



(xU)t 



P.Mj 



Uq 



HANDBOOK 



OFTHB 



LAW OF CONTRACTS 



THIRD EDITION 



CHAPTER I 

DBFINinON, NATURE, AND REQUISITES OF OONTRAOT IN 

GENERAL 
1-2. Contract Defined. 
8. Agreement 

4. ObUgatlon. 

5. Concurrence of Agreement and Obligation. 

6. Promise. 

7-0. "Void," "Voidable,*' and "Unenforceable^ Agreements. 
10. Bsaratlals of Contract 



CONTRACT DEFINED— BROADEST SENSE 

L A contract, in its broadest sense, is an agreement whereby one 
or more of the parties acquire a right, in rem or in per- 
sonam, in relation to some person, thing, act, or forbear- 
ance. It may be, in its inception: 

(a) Executory; that is, where an obligation is assumed by one 

or both parties to do or to forbear from doing some act. 
The rights acquired are rights in personam. 

(b) Executed; that is, where everything is done at the time of 

agreement, and no obligation is assumed, as in the case 
of a conveyance of land without covenants, or a sale and 
inunediate delivery of goods for cash and without war- 
ranty.^ Executory contracts when fully performed are 
also said to be executed. 



iTbe propriety of calling such an agreement a eontract has been ques- 
liAiied. Post, p^ 8, note 10. 

Olask Cont.(8d Ed.) — ^1 



DBFINITION, NATURE, AND REQUISITES OF CONTRACT (Ch. 1 



SAME— PROPER SENSE 

2. A contract in its narrower, and more proper, sense is an execu- 
tory contract. It is the result of the concurrence of agree- 
ment and obligation, and may be defined as an agreement 
enforceable at law, made between two or more persons, 
by which rights are acquired by one or more to acts or 
forbearances on the part of the other or others.* 

It has been said that "a contract becomes executed when all is 
done that its terms require to be performed. Until that situation 
is attained the contract is executory." • When we speak of con- 
tracts we generally mean executory contracts, and it is of this kind 
of contract principally that this work is to treat. A contract in 
this sense results from the combination of the two ideas of "agree- 
ment" and "obligation." It is that form of agreement, or meeting 
of minds, which directly contemplates and creates an obligation; 
and the contractual obligation is that form of obligation which 
springs directly from agreement. It is necessary, therefore, to un- 
derstand cleaVly what is meant by the terms "agreement" and "ob- 
ligation," and how they may or may not concur so as to create a 
contract. 

s The following are some of the definitions given in the books: 

''An agreement enforceable at law, made between two or more persons, by 
which rights are acquired by-one or more to acts or forbearances on the part 
of the other or others." Anson, Gont (8th Ed.) 9. 

"Every agreement and promise enforceable by law Is a contract'* Pol. 
Cont 1. 

"An agreement, upon sufficient consideration, to do or not to do a particu- 
lar thing." Bl. Comm. 442; 2 Kent, Gomm. 449. 

"An agreement between two or more parties for the doing or the not doing 
of some particular thing.'* 1 Pars. Gont 6. 

"A contract or agreement not under seal may be defined to be an engage- 
ment entered Into between two or more persons, whereby, In consideration 
of something done or to be done by the party or parties on one side, the 
party or parties on the other promise to do or omit to do some act" Ghlt 
Cont 7. 

"A contract la a promise from one or more persons to another or others, 
either made in fact or created by law, to do or refrain from some lawful 
thing ; being also under the seal of the promisor, or being reduced to a Judi- 
cial record, or being accompanied by a valid consideration, or being executed 
and not being In a form forbidden or declared inadequate by law." BUh. 
Cont I 22. See '*Contract9," Deo. Dig. (Key-No.) § i; Cent. Dig. i 1. 

8 Leadbetter v. Hawley, 59 Or. 42!2, 117 Pac. 289, 505. Bee **Oontract$,'* 
Deo. Dig. {Key-No.) i 6; Cent. Dig. f 8. 



I 8) AOBEBHBMT 8 



AGREEMENT 

• 

3. Agreement is the expression by two or more persons, either by 
words or by conduct, of a common intention to afiFect the 
legal relations of those persons/ There must be a meet- 
ing of two minds in one and the same intention* 

From the very nature of agreement the first essential is the con- 
sent of the parties. There must be a meeting of two minds in one 
and the same intention. In the absence of this element there can 
be no agreement, and, therefore, no contract 

Two Parties Necessary 

It is manifest that at least two parties are necessary. There 
may be more than two, but there cannot be less. It is therefore 
impossible for a man to make an agreement or contract with him- 
self.' 

Distinct CommoH Intention 

It is also essential that there be a distinct intention, and an in- 
tention which is common to both parties; or, as it is sometimes 
expressed, the parties must assent to the same thing in the same 
sense.* If there is doubt or difference, there is no meeting of 
minds, and hence no agreement. If a person, when asked whether 
he will do a certain thing, says, "Very possibly," there is doubt, 
and no agreement is reached ; ^ and if he says he will do something 
else, there is a difference, and therefore no agreement. 

4 See Anson, Cont (4tli Ed.) 8. **{!) An agreement is an act In the law, 
whereby two or more persons declare their consent as to any act or thing to 
be done or forborne by some or one of those persons for the use of the others 
or other of thent (2) Such declaration may consist of (a) the concurrence 
of the parties in a spoken or written form of words as expressing their com- 
mon intention, or (l^ a proposal made by some or one of them, and accepted 
by the others or other of them." PoL Cont 1. 

• Thus a promise made by a person in his Individual capacity to himself 
as executor is void. See GORHAM*S ADM'R v. MBACHAM'S ADM*R, 63 
Yt 231, 22 Atl. 572, 13 L. R. A. 676, Throckmorton Cas. Contracts, 3, in 
which it is said, per Tyler, J.: "Until the concurrence of the two minds, 
there is no contract" Another reason why a man cannot enter into a con- 
tract ¥rith himself is because he cannot be under a legal obligation to him- 
self. Post, p. 6. Bee ''Contractu;* Dec Dig, iKey-No.) if Ur-lS; Cent. Dig. 

• American Can Co. ▼. Agricultural Ins. Co. of Watertown, N. Y., 12 Cal. 
App. 183, 108 Pac. 720; Luckey v. St Louis & S. F. R. Co., 133 Mo. App. 
589, 113 8. W. 703. See ''Contracts;' Dec. Dig. (Key-No,) S U; Cent. Dig. f 48. 

T "I think I might purchase your horse at $200, the price you ask me," does 
not constitute an acceptance of an offer to sell the horse at $200l Stagg 
▼. Compton, 81 Ind. 171. See ''Contracts;' Dec. Dig. {Ketf-No.) { 14; Cent. 
Dig. I 4& 



4 DBFINITION, NATUBBy AND BBQUISITBS OV CONTBACT (Ch. 1 

CommuniccUion of Intention 

Agreement further imports that there shall be a mutual com- 
munication between the parties of their intentions to agree, for 
without this neither could know the state of the other^s mind. 
The law, therefore, judges of an agreement between two persons 
exclusively from those expressions of their intentions which are 
communicated between them.* Mere uncommunicated intention, 
though common to both parties, cannot constitute agreement. If 
a person asks another if he will do something, and the latter makes 
no reply, there is no agreement, even though he may intend to do 
it. A secret acceptance of a proposal cannot constitute agreement ; 
nor, it is said, can agreement result where the intention of a party 
is communicated, not to the other party, but to a third person.* 
So, the fact that a party has changed his mind after making an 
offer and does not really intend to contract is of no significance 
if he does not communicate his change of intention to the other 
party before acceptance. And if one party has reasonably led the^ 
other to believe that he is making an offer the other may, by ac- 
ceptance, convert such apparent offer into a contract although in 
fact no offer was intended. In like manner if a person to whom an 
offer has been submitted makes such statement or does such act 
with respect thereto as would lead an ordinarily prudent person, 
acting in good faith, to believe that the proposition had been ac- 
cepted, and the proposer accordingly acts upon that assumption, 
a contract results, notwithstanding secret intentions of the offeree 
not to accept.** As we shall see, communication may be by con- 
duct as well as by words. 

Reference to Legal Relations 

An agreement, to be recognized as such by the law, so as to con- 
stitute a contract, must be ''an act in the law ;" ** that is, it must 

• Rodgers, McOabe ft Ck>. t. Bell, 156 N. O. 378, 72 S. B. 817 [dt Clark on 
Contracts, pp. 2, 3]. fifea "Contracts/* Deo, Dig. {Key-Vo,) | ««; Cent. Dig. 
§i 8Z-92. 

• Leake, Cont 8. Intention may be communicated to the agent of a party, 
but this Is equivalent to communication to the party himself. ''In the case 
In hand/' it was said, "the plaintiff determined to accept But a mental de- 
termination not indicated by speech, or put in course of indication by act 
to the other party, is not an acceptance which wiU bind the other. Nor does 
an act which in itself is no indication of an acceptance become such because 
accompanied by an uneTlnced mental determination." WHITE v. CORLIES, 
46 N. Y. 467, Throckmorton Cas. Contracts, 1. Bee "Contracts,** Dec Dig. 
(Key-No.) | 2t; Cent. Dig. || 82-92. 

10 Northrup v. Colter, 130 Mo. App. 639, 131 S. W. 364. See "Contracts,** 
Dec. Dig. (Key-No.) i 16; Cent. Dig. K 49-^6, 71-92. 

11 Pol. Cont 2. 



§ 8) AGREEMENT 5 

be, on the face of the matter, capable of having legal effects ; and 
therefore, the intention of the parties must refer to legal relations, 
so that the courts, which can only deal with legal relations, may 
take cognizance of it. It must have reference to the assumption 
of legal rights and duties, as opposed to engagements of a social 
character and engagements of honor. If a person agrees to sell 
another a horse, the agreement refers to legal relations, and may 
result in contract ; but, if a person agrees to go to another's house 
to dine, the intention refers merely to a social engagement, and no 
contract results. Legal, consequences are not contemplated.^* 

Consequences must Affect the Parties 

In order that agreement may result in obligation, so as to con- 
stitute contract, the consequences of the agreement must affect the 
parties themselves; otherwise the verdict of a jury, which is an 
agreement between the jurors, would satisfy the requirements.^* 

IS It has been said that we may accept as a test of tlds question ViBt the 
intention must relate to something which is of some yalne in the eye of the 
law, something which can be assessed at a money value. Anson, Gont 2. 
It is true that the matter of an agreement must b^ reducible to a money 
ralne, to be enforceable ; but this necessity does not spring from the nature 
of agreement See post, p. 6^ Furthermore, there may be agreements which 
win meet this requirement, and yet will not result in contract, because of 
the intention of the parties ; that is to say, because of failure to refer to le- 
gal relations. A man who inyites another to dine with him, or perform any 
other social function, goes to expense in making preparations, and if the en- 
gagement is broken, there is a loss which may be assessed at a money value, 
but this does not make the agreement a contract The reason is that the 
parties do not contemplate legal relations and consequences. The engage- 
ment is merely a social one; The fact that the matter contemplated is re- 
ducible to a money value does not make the agreement a contract, unless, la 
addition to this, the parties intend to affect their legal relations. Pol. Gont 
% note (a). See Barle v. Angell, 107 Mass. 294, 82 N. B. 164. Bee "Ooih 
tractMr Deo. Dig. (Key-Vo.) || 7, Ik; Cent. Dig. H P, 48. 

1* If a fund is held by the trustees under a wiU, to be paid over to the 
testator's daughter on her marriage with their consent, and they give their 
consent to her marrying J. S., this declaration of consent affects the duties 
of the trustees themselves, for it is one of the elements determining their 
duty to pay over the fund. Still it is not an agreement, for it concerns ne 
duty to be performed by any one of the trustees towards any other of them. 
There is a common duty to the beneficiary, but no mutual obligation." PoL 
Cent 3. 



6 DBFlMlTIONf MATUBB, AND RBQUISITB8 OF COMTBACT (Ch. 1 



OBLIGATION 

4. Obligation b a control exercisable by definite persons over defi* 
nite persons for the purpose of definite acts or forbear^ 
ances reducible to a money value.^^ 

Obligation is a legal bond or tie whereby constraint is laid upon 
a person or group of persons to act or forbear on behalf of another 
person or group. Since there can be no contract without obligation, 
every element essential to the creation of an obligation is essential 
to the creation of a contract. 

4 

Two Parties Necessary 

From the very nature of things, two persons arc necessary. 
There may be more than two, but there cannot be less. A man 
cannot be under a legal obligation to himself, or even to himself 
in conjunction with others. In an English case, where a man had 
borrowed money from a fund in which he and others were jointly 
interested, and covenanted to repay the money to the joint ac- 
count, it was held that he could not be sued upon his covenant. 
"The covenant, to my mind, is senseless," said Pollock, C. B. "I 
do not know what is meant, in point of law, by a man' paying him- 
self." ^* And in a Massachusetts case it was said that "it is a first 
principle that, in whatever different capacities a person may act, 
he never can contract with himself, nor maintain an action against 
hirtiself. He can in no form be both obligor and obligee." *• 

The Parties Must be Definite 

The parties to an obligation must be definite, both those having 
the right to exercise control and those bound. A man cannot be 
under an obligation to the entire community. His liabilities to the 
political society of which he is a member are matters of public or 
criminal law. Nor can the whole community be under an obliga- 
tion to him. The correlative right on his part would be a right in 
rem, and would constitute property, as opposed to obligation. 



i« Anson, Gont (4th E^.) 7. "By 'obligation* we mean the relation that ex- 
ists between two persons, of whom one has a priTate and peculiar right (that 
is, not a merely public or official right, or a right incident to ownership or a 
permanent family relation) to control the other's actions by calling upon him 
to do or forbear some particular thing/' Pol. Gont a. 

IB Faulkner y. Lowe, 2 Ezch. 695. Bee **Contracts," Deo. Dig. {Key-No.) |i 
11-14; Cent. Dig. || ^-48. 

i« Eastman y. Wright, 6 Pick. (Mass.) 316. And see Allin y. Shadburne'ts 
Bz'r, 1 Dana (Ky.) 68, 25 Am. Dec. 121. See, also, ante, p. S, note 5. Bee 
^'Contracts;* Dec, Dig. (Key-No.) {{ ll-H; Cent. Dig. {{ 42-^48. 



S 5) OOHOUBBBKOB OF AOBBBMENT AND OBIJGATION 7 

Whether the right is to personal freedom or security, to character, 
or to those more material objects which we commonly call prop- 
erty, it imposes a corresponding. duty od all to forbear from mo- 
lesting the right. Such a right is a right in rem. It is of the es- 
sence of obligation that the liabilities imposed are imposed on def- 
inite persons, and are themselves definite. The rights which it 
creates are rights in personam.*^ There are apparent exceptions 
to this rule in the case of contracts made by and with cities and 
other municipal corporations and with the state. The state repre- 
sents the public, and such is also the case with municipal corpora- 
tions, but this fact does not prevent contracts with them. A mu- 
nicipal corporation ^ or the state is a definite party, distinct from 
the members of the community. 

The Rights and Liabilities Must be Definite 

To constitute an obligation enforceable in law, the rights and 
liabilities given and imposed must be definite. Id other words, it 
must relate to definite acts and forbearances. The freedom of the 
person bound by an obligation is not curtailed generally, but is 
limited in* reference to some particular act or series or class of acts. 
If the thing to be done or forborne is so indefinite or uncertain 
that the court cannot say what was agreed upon, it cannot enforce 
the agreement^* An agreement not enforceable creates no obliga- 
tion, and therefore cannot result in contract. 

The Thing to be Done or Forborne must be Reducible to a Money 
Value 
The matter of the obligation — ^that is, the thing to be done or 
forborne — must possess,, or must be reducible to, a pecuniary 
value. It must have some ascertainable value, in order to distin- 
guish legal from moral and social relations. Gratitude for a past 
kindness cannot be measured by any standard of vahie, nor can 
annoyance and disappointment, caused by the breach of a social 
engagement. Courts of law can only deal with matters to which 
the parties have attached an importance estimable by a standard 
of value of which the courts may take cognizance. 



CONCURRENCE OF AGREEMENT AND OBLIGATION 

5. An agreement resulting in contract is that form of agreement 
which directly contemplates and creates an obligation; 
and the contractual obligation is that form of obligation 
which springs directly from' agreement. 

If Anson, Cont (4th Ed.) & ^^ See post, p. M. 



8 DBFINITION, NATURB, AND RBQUiaiTB8 OV CONTBACT (Ch. 1 

Agreement Broader Term than Contract 

"Agreement" is a broader term than "contract/* and includes acts 
in the law of two kinds besides those which we ordinarily term con- 
t;racts : 

(1) An agreement, for instance, may not create an obligation, 
and therefore, in reason, may not result in a contract, because its 
effect is concluded as soon as the parties have expressed their com- 
mon assent. Such are conveyances of land without covenants, gifts, 
and sales of chattels for cash, with immediate delivery, and without 
warranty. The agreement of the parties effects at once a transfer of 
rig^hts in rem, and leaves no obligation subsisting between them. 
Such agreements are called "executed contracts," but they create 
no outstanding contractual obligation, and it is at least question- 
able whether they can properly be tehned contracts.** It is other- 
wise if the conveyance is with covenants annexed, or if the sale is 
on future delivery, or on credit, or with a warranty. 

(2) Again, an agreement may create obligations only incidentally 
or remotely, and therefore not constitute a contract ; the essence of 
contract being in the fact that the direct purpose of the agreement 
is to create an obligation. Such agreements have the characteristic 
just alluded to of effecting their main object immediately upon the 

' expression of the intention of the parties, but they differ from sim- 
ple conveyances and gifts, not only in creating outstanding obliga- 
tions between the parties, but sometimes in providing for the com- 
ing into existence of other obligations, and those not between the 
original parties to the agreement. Marriage, for instance, some- 
times erroneously called a contract, effects a change of status from 
the moment the consent of the parties is expressed before a compe- 
tent authority. At the same time it creates obligations between 
the parties which are incidental to the transaction, and to the im- 
mediate objects of the expression of consent or agreement. So, 

!• There is the highest authority for speaking of conyeyances of land with- 
ont coTenants, gifts, and sales of goods for cash, with immediate deUvery, 
and without Warranty, as executed contracts. 2 Bl. Comm. 443; 1 Story, 
Gont (4th Ed.) | 22; Fletcher ▼. Peck, 6 Cranch, 87, 8 L. Ed. 162. The 
propriety, however, of calling sach agreements contracts has, with reason, 
been questioned. Anson, Gont 8. It is of the essence of contract, as a legal 
conception, that it shall contemplate and create a right in personam ; that it 
shall imi>ose an obligation on one of the parties to d6 or forbear from doing 
some act An agreement by which a person binds himself to convey land 
would therefore be a contract; but how can a conveyance be called a con- 
tract? It creates no obligation, but, at the very moment the parties agree, 
the agreement is carried out To the effect that an executed gift is not a 
contract, see Wheeler v. Glasgow, 97 Ala. 700, 11 South. 758. Bee VCon- 
tractM,'* Deo. Dig, (Kev-No.) | 6; Cent Dig. i 8; "Vendor and Purchaser,** 
Dec Dig. {Key-yo,) f 5S; Cent. Dig. { 84. 



f 5) OONOURBBNCB OF AGBEEMSNT AND OBLIOATION 9 

also, a settlement of property in trust for persons unborn effects 
much more than the mere conveyance of a legal estate to the tms* 
tee. It imposes on him incidental obligations, some of which may 
not come into existence for a long time. It creates possibilities of 
obligation between him and persons who are not yet in existence. 
These obligations are the result of agreement, but they are not 
contract.** 

Sources of ObligaHon ■* — Directly from Agreement 

Obligation may arise directly from agreement. Here we find that 
form of agreement which constitutes contract. An offer is made by 
(Mie person and accepted by another, so that one consents to intend, 
and the other to expect, the same thing; and the result of this 
agreement is a legal tie, binding the parties to one another in re- 
spect to some future act or forbearance. 

Same — Delict or Tort 

Obligation may arise from delict or tort. This occurs where a 
primary right to forbearance has be^sn violated ; where, for instance, 
a right to property, to security, or to character has been violated by 
trespass, assault, or defamation. The wrongdoer is bound to pay to 
the injured party whatever damages he has sustained. Such an ob- 
ligation is not created by the free will of the parties, or by agree- 
ment, but springs up immediately upon the occurrence of the 
wrongful act. The person injured has a cause of action which is 
said to arise ex delicto, as distinguished from such as arise ex con- 
tractu." 

Same — Breach of Contract 

Obligation may arise from breach of contract While one person 
is under, promise to another, the promisee has a right against the 
promisor to performance of the promise when performance becomes 
due, and to the maintenance up to that time of the contractual re- 
lation. But, if th^ promisor breaks his promise, the promisee's right 
to performance has been violated, and, even if the contract is not 
discharged, a new obligation springs up, — a right of action for 
damages, similar to that which arises upon a delict or tort. The 
cause of action results from the breach of contract, and is said to 
arise ex contractu. 

Same — Quasi Contract 

There are certain obligations which arise neither from tort nor 
from contract, but which are imposed by law without assent of the 

• * 

te Anson, Oont (4th Ed.) 8 ; Wade t. Kalbflelsch, 58 N. Y. 282, 17 Am. Rep. 
250; Ditson ▼. Dltson, 4 R. I. 87; Maynard v. Hill, 125 U. S. 190, 8 Sui>. Ct 
723, 81 L. Ed. 654 : Watkins ▼. Watklns, 135 Mass. 83. Bee '^ContraeU;* 
Dec, Dig. (Key-No.) f 10; Cent Dig, || tl-kO. 

ti Anson, Cont (4tli Ed.) 7. " Leake, Cont 8. 



10 DBFINITION, NATURB, AND REQUISITBS OF CONTBACT (Ch. 1 

party bound. These obligations are not contracts, for there is no 
agreement ; but they are clothed with the semblance of contract for 
the purpose of remedy, and are described by the term quasi con- 
tract.** Obligation may arise from the judgment of a court of com- 
petent jurisdiction ordering something to be done or forborne by 
one party in respect of another. This kind of obligation is called a 
"contract of record." It may arise from entry of judgment by con- 
sent of the parties, in which event the element of agreement is pres- 
ent; but, on the other hand, it may arise against the will of the 
party bound, thereby, in which case there is no element of agree- 
ment, and therefore no true contract. Such an obligation is quasi 
contractual.** 

Again, a quasi contractual obligation may arise by the acts of the 
parties. A person pays something which another ought to pay, or 
receives something which anothei; ought to receive, and the law 
imposes on him the duty to make good to the other party the ad- 
vantage to which the other is entitled. The term "implied con- 
tract" is frequently applied to obligations of this class. Its use is 
objectionable, because the same term is frequently applied to true 
contracts in which the agreement of the parties is evidenced by 
conduct, and which are hence called "implied contracts," in distinc- 
tion to contracts in which the agreement is evidenced by words, 
and which are said to be express.** 

Same — Indirectly from Agreement — Marriage — Trusts 

Finally, obligation may spring from agreement, and yet be distin- 
guishable from contract. As explained in speaking of agreement, 
this is the case with obligations incidental to such acts as marriage 
and the creation of a trust. Contractual obligations may arise in- 
cidentally to an agreement which has for its direct object the 
transfer of property. In the case of a conveyance of land with cov- 

s» City of Chicago t. Pittsburg, C, C. & St L. R. Co., 146 lU. App. 403 [af- 
firmed 242 Ul. 80, 89 N. E. 648] ; Leonard ▼. State, 56 Tex. Cr. R. 307, 120 
S. W. U83. And see post, p. 623. Such obligations are also variously called 
"implied contracts" and "constructive contracts." Harty Bros. & Harty Co. 
▼. Polakow, 237 lU. 659, 88 N. B. 1086. Bee ''Contracts;* Dee. Dig. {Key-No.) 
^ 6; CmU. Dig. | 7; ''Judgmewt,*" Deo.. Dig. {Key-No.) t| t, 5; CetiU. Dig 4 

m. 

s« Post, p. 624. 

ss For full discussion of the senses in which the term '*implled contract** is 
used, see HERTZOG t. HERTZOG, 29 Pa. 465, Throckmorton Cas. Con- 
tracts, 5; Welnsberg v. St Louis Cordage Co., 135 Mo. App. 553, 116 S. W. 
461; Harty Broa & Harty Co. v. Polakow, 237 111. 559, 86 N. B. 1085. See^ 
also, post, p, 20. See "Contractg,"* Dec Dig. {Key-No^ | i; Cent. Dig. H 



§ 6) PBOMI8B 11 

enants annexed, or the sale of a chattel with a warranty, the obliga- 
tion hangs loosely to the conveyance or sale, and is so easily dis- 
tinguishable that it may be dealt with as a contract. But in cases 
of trust or marriage the agreement is far-reaching in its objects, 
and the obligations incidental to it are either contingent, or at any 
rate remote from its main purpose or immediate operation. To 
create an obligation is the one object which the parties have in view 
when they enter into that form of agreement which is called con- 
tract 

PROMISE 

6. A promise Is the communication by a person of an intention and 
wilUngneaa to be bound to do or to forbear from doing 
something at the request or for the use of another, when, 
but not before, that declaration has become binding by its 
acceptance by the promisee so as to create an obligation.** 
A promissory expression before acceptance is merely an 
offer of a promise. 

We are in the habit of considering as the essential feature of con- 
tract a promise by one or more parties to another or others to do or 
to forbear from doing certain specified acts ; and many of the books 
use the term "promise," rather than "agreement," to define con- 
tract ."In an agreement as the source of a legal contract," it is said, 
"the matter intended and agreed imports that the one party shall 
be bound to the other in some act or performance, which the letter 
shall have a legal right to enforce." The signification of an inten- 
tion to do some act, or observe some particular course of conduct, 
made by the one party to the other, and accepted by him, for the 
purpose of creating a right to its accomplishment, is called a prom- 



ise." 



The term "promise" is used to signify a binding promise, as pp- 
posedTto "a 'mere o ffer of a promise. A promissory expression 
amountmg to an offer of a promise does not become a promise until 
it becomes binding by its acceptance by the person to whom it is 
made. Before it is accepted it is a mere offer of ^ promise, called in 
the civil law a "pollicitation." *• It must also be noted that it is 
not every statement of intention that will amount to an offer of a 
promise which by acceptance will be turned into a promise. An of- 
fer differs from a mere statement of intention in that it imports a 

>• Anson, Cont (4tb Ed.) 4; PoL Cont I. 

sr Leake, Oout 18. *• See post, p. 26. 



12 DSriNITION, NATURE, AND BEQUISITSS OF CONTRACT (Ch. 1 

willingness to be bound to the party to whom it is made. If a per- 
son says to another, "I intend to sell my horse if I can get $100 for 
it/' there is no offer that can be turned intcf an agreement, but 
merely a declaration of intention. There is no declaration of will- 
ingness to be bound. If, however, he says, "I will sell you my 
horse if you will give me $100 for it," there is an offer, and, if it is 
accepted, there is a contract, consisting of mutual binding promises 
to deliver the horse on the one side, and to accept and pay for it on 
the other. 

Looking at a contract, then, in the light of a promise, we may say 
that there are three stages necessary to the making of that sort of 
agreement which results in a. con tract: (1) There must be an offer; 
(2) there must be an acceptance of the offer, resulting in a promise ; 
and (3) the law must attach a binding force to the promise, so as 
to invest it with the character of an obligation. 

The promise results from the agreement of the parties, and neces- 
sarily results from every agreement which directly, contemplates 
and creates an obligation. The agreement makes the-contract, and 
the promise is merely a feature of the contract. 

/ 

VOID, VOIDABLE, AND UNENFORCEABLE AGREE- 
MENTS 

7. A void agreement is one that is entirely destitute of legal effect. / 

8. A voidable contract is one that is capable of being affirmed or ' 

rejected at the option of one of the parties, but which is , 
binding on the other. / 

9. An unenforceable contract is one that is valid, but incapable of , 

being sued upon or proved. 

We have seen, and in dealing with the formation of contract we 
shall see more in detail, that certain requisites are essential, and, if 
they are absent, the contract is said to be void. By this it is meant 
that it has no legal effect whatever. Clearly, in such a case, there is 
no contract at all, and it is a misuse of terms to speak of it as such. 
A transaction or agreement cannot be void and be called a con- 
tract, so it is more accurate to say that the transaction or agree- 
ment is void. 

A voidable contract is not destitute of legal effect, but may be 
valid and binding. It is a contract that is capable of being affirmed 
or rejected at the option of one of the parties. It is binding if he 
chooses to affirm it, and is of no effect if he chooses to reject it. 
The other party has no say in the matter. Such is the case, as we 



/ 



§§ 7-9) yOID, VOIDABLE, AMD UNENFOBGBABLS A0BBBMENT8 13 

shall see, with contracts into which one of the parties has induced 
the other to enter by means of fraud. The latter may repudiate the 
contract, or, if he sees fit, he may waive the fraud, and hold the 
former to his bargain. 

It will seem, at first thought, that certain agreements said to be 
void are not so in fact. For instance, as we shall see, an agreement 
may be void on the ground of mistake, or, in a few cases, because 
of the infancy of one of the parties ; but, if the mistake or infancy 
is not pleaded in the action to enforce it, the parties will be held 
bound. Such an agreement, however, is just as void as an agree- 
ment to do something which the law forbids. The cause of nullity 
is latent, but this does not alter the character of the transaction. It 
is void if the defendant chooses to prove it so.'* 

If the defendant in these cases may, at his option, avoid the con- 
tract, or let it stand, there would seem to be a certain unreality in 
the distinction between void and voidable agreements ; but this is 
not so in fact. In case of voidable agreements there is a contract, 
though it is marked by a flaw ; and the party who has the option 
may affirm it in spite of the flaw. Where, however, an agreement is 
void, it falls to the ground as soon as its nullity becomes apparent. 
It is incapable of affirmance. Another distinction is in the fact that 
i n case of vo idable con tracts innocent third persons, acting in good 
faith, jmayjicquire rights thereunder, and thereby cut off the right' 
to avoid it; butncT such rights can be acquired where the transac- 
tioixJilxQi!!** 

A contract which is unenforceable cannot be set aside at the op- 
tion of one of the parties to it. The obstacles to its enforcement do 
not touch the ^istence of the contract, but only set difficulties in 
the way of action being brought or proof g^ven. The contract is 
valid, but because of these obstacles it cannot be enforced. Such is 
a contract, as we shall see, which fails to comply with some of the 
provisions of the statute of frauds, requiring writing, and so cannot 
be proved ; or a contract which has become barred by the statute 
of limitations. The defect in these contracts is not irremediable. 
In the first it may be remedied by supplying the writing, and in the 
second by procuring a proper acknowledgment of the barred debt ; 
but it will be noticed that the defect can be remedie4 only with the 
concurrence of the party to be made liable: 

«• Anson. Cont (4th Ed.) 204. »« Post, p. 295. 



14 DBFINITIOIf, NATURB, AND BBQUI8ITB8 OF CONTRACT X^^^- ^ 



ESSENTIALS OP CONTRACT 

Having ascertained the particular features of contract as a joris- 
tic conception, the next step is to ascertain how contracts are made. 
A part of the definition of contract being that it is an agreement 
enforceable at law, it follows that we must analyze the elements of 
ft contract such as the law will hold to be binding between the par- 
ties to it. 

10. As there must be an agreement directly contemplating and re- 
sulting in an obligation, and the agreement must be en-^ 
forceable in the law, therefore — 

(a) There must be a distinct commimication by the parties to 

one another of their intention, or an offer and acceptance. 

(b) The agreement must possess the marks which the law re- 

quires in order that it may affect the legal relations of the 
parties, and be an act in the law. Therefore— 

(1) It must be in the form required by law. 

(2) There must be a consideration, when required by law. 

(c) The parties must be capable in law of making a valid con- 

tract. 

(d) The cimsent expressed in offer and acceptance must be gen- 

uine. 

(e) The objects which the contract proposes to effect must be 

legaL" 

Where all of these elements coexist, a valid contract is the result. 
If any one of them is absent, the agreement is in some cases merely 
unenforceable ; in some voidable at the option of one of the parties ; 
and in some absolutely void. We shall now take up in turn each of 
these elements in separate chapters. 

»i Justice V. Lang, 42 N. Y. 493, 1 Am. Rep. 576w Bee **0(mtract9^'' Deo. 
Dig' {Key-I^o.) | 103; Cent. Dig. U 468-476. 



II 11-18) OITBB AND AOOBFTANCa U 



9 



CHAPTER II 

OFFER AND ACCEPTANCB 

11-18. fa General. 

14-18. Gommaiilcatlon by Conduct— Implied Contracts. 

16. Commnnlcatlon of Offer. 

17. Necessity and Effect of Acceptance. 
18-20. Communication of Acceptance. 

21. Gbaracter, Mode, Plaoe^ and Time of Acceptance. 

22-23. BeTOcatlon of Offer. 

24. Lapse of Offer. 

25. Offers to the Public Generally. 

28. Offer as Referring to Legal Relations. 



IN GENERAL 

11. To constitute a contract, the expression of common intention 

must generally, if not always, arise from an offer made by 
one party to another, and an acceptance by the latter, witii 
the result that one or both are bound by a promise. 

12. The offer may be— 

(a) Of a promise, or 

(b) Of an act. 

13. The acceptance may b^^ 

(a) Simple assent ; but this applies to contracts tmder seal only. 

(b) Giving of a promise. 

(c) Doing of an act. 

In practical matters, and for the purpose of creating obligations, 
every expression of a common intention arrived at by two or more 
parties is ultimately reducible to question and answer, or to offer 
and acceptance.^ Thus, if a person agrees to sell an article to an- 
other for a certain price, and the latter agrees to buy it, we can 
trace the process to the moment when the seller says in words 

1 Anson, Cont (4tli Ed.) 11 ; Leake, Gont 12 ; Thmston ▼. Thornton, 1 Cush. 
(Mass.) 91. PoUock objects that this analysis does not properly apply to a 
case In whidi the consent of the parties Is declared In a set form, — as where 
tbey both execute a deed or sign a written agreement PoL Cont 4. But he 
adds that, "notwithstanding the dlfflcultlee that arise In making proposal 
and acceptance necessary parts of the general conception of contract, there 
Is no doubt that in practice they are the normal and most important ele- 
ments." Id. 8. B9% **CimtracU,*' Deo. Dig. (Key-No.) ^ 1$; Cent. Dig. |l 



I 



16 OFFBB AND ACCBPTANCB (Ch. 2 

or by conduct, "Will you give me so. much for the article?" and 
the buyer replies, "I will ;" or when the buyer says, "Will you take 
so much for the article?" and the seller says, "I will." There is 
always this question and answer, or oifer and acceptance, though 
in many cases it is not in so many words. A tradesman displaying 
his goods says in act, though not in words, "Will you buy my 
goods at my price?" and a customer taking goods widi the trades- 
man's cognizance virtually says, "I will." The proprietor of a 
public conveyance, by running it in such a way and place as to in- 
vite people to use it, virtually says, "Will you pay me the fare if 
I carry you ?" and one who gets into the conveyance to be carried, 
by his conduct says, "I will," as plainly as if he were to use the 
words. And so all contracts, or voluntary obligations, may be re- 
duced to question and answer, either in words, or by conduct, or 
both. The question is the offer ; the answer the acceptance of the 
offer. ' 

A written contract, the terms of which have been agreed upon 
by the parties, but which they have further agreed is to become 
binding only upon its execution and delivery, is an apparent ex- 
ception to the above rule that every contract originates in an offer 
and acceptance. But the delivery of the written instrument by one 
party, either in person or through his agent, may be said to consti- 
tute an offer, and its receipt and approval by the other party an 
acceptance. 

* 

Eorms of Offer and Acceptance 

(1) A contract may originate in the offer of a promise, and its ac- 
ceptance by simple assent, but this applies only to contracts under 
seal, for, as will presently be seen, the law requires a consideration 
to support a promise not under seal, and mere assent is not enough. 
Thus, where one person promises another by \7riting under seal 
that he will do a certain thing, or pay a certain sum, and the prom- 
isee assents to the proposal, both are bound, and there is a con- 
tract* 

(2) As already shbwn, the presence of a public conveyance on 
the street is a constant offer by its proprietor to carry persons, and 
when a person steps into the conveyance he accepts the offer, and 
promises to pay the fare. This is an offer of an act for a promise. 

(3) If a person who has lost property offers by advertisement a 
reward to any person who shall return it, he offers a promise for an 
act, and when a person returns the property he accepts and per<- 
forms the act, and the promise becomes binding. 

i Am to offers and contracts under seal, see post, pp. 62 et seq. 



g§ 11-13) IN GENERAL 17 

(4) If a person offers another to pay him a certain sum on a 
future day if the latter will promise to perform certain services for 
him before that day, or, vice versa, he offers a promise for a prom- 
ise, and where the person to whom the offer is made accepts it by 
promising to perform the services or to pay, as the case may be,' 
both parties are bound^ the one to do the work and the other to 
make the payment. This is the offer of a promise for a promise. 

A contract in which there is an offer of a promise for an act is 
sometimes called a "unilateral" contract, because there is a sub- 
sisting obligation on the part of only one party ; and it is distin- 
guished from a contract consisting of an offer 'of a promise for a 
promise, which is said to be "bilateral" because imposing an exist- 
ing obligation on each party.* 

Executed and Executory Consideration 

It will be noticed that cases (2) and (3) differ from (4) in an 
important respect. In (2) and (3) the contract is formed by one 
party doing all he can be required to do under the contract The 
contract is formed by performance on one side, and it is this per- 
formance which makes obligatory the promise on the other. The 
outstanding obligation is all on one side. In (4) each party is 
bound to some act or forbearance in the future. There is an out- 
standing obligation on both sides. Where the benefit, in contem- 
plation of which the promise is made, is done at the same time that 
the promise acquires a binding force, — where it is the doing of the 
act that concludes the contract, — then the act so done is called an 
executed or present consideration for the promise. Where a prom- 
ise is given for a promise, each forming the consideration for the 
other, the consideration is said to be executory or future. 

• Great Northern R. Go. ▼. Witham, 9 Law Rep. (a O. P.) 12, 19; Busher 
▼. New York Life Ins. Co., 72 N. H. 551, 58 Atl. 41; Nicholson r. Acme Ce- 
ment Plaster Co., 146 Mo. App. 523, 122 a W. 773; 2 lU. Law Review, 463 
(Rosooe Poimd). The word ''unilateral" is also sometimes used to express 
the idea of an agreement not binding because lacking in mutuality of obliga- 
tion. For criticism of this use, see High Wheel Auto Parts Co. y. Journal 
C3o. of Troy, 50 Ind. App. 39B, 98 N. B. 442, 8€4 ^'Contract;** Dee. Dig, {Key- 
Vo.) I 10; Cent, Dig. %% 21-40. 
CULBK Cont.(Sd Ed.>-'2 



18 OFFVR AND ACCBPTANCH (Ch. 2 



COMMUNICATION BY CONDUCT— IMPLIED CONTRACTS 

14. An offer or its acceptance may be made by conduct aa well as 

by words. 

15. Where the terms of a contract are shown by the acts of the par- 

tieSy the contract is said to be implied. It is, however, im- 
plied as a matter of fact. There is an agreement in fact, 
evidenced by acts. 

From what has already been said as to the possible forms of of- 
fer and acceptance, it will have been seen that conduct may take 
the place of written or spoken words in the making of contracts/ 

If a person asks another to perform a service for him for com- 
pensation, the latter may accept the offer simply by performing 
the service, unless a particular form of acceptance is prescribed in 
the offer. His acceptance is inferred or implied from his conduct." 

Again, if a person allows another to work for him under such 
circumstances that no reasonable man would suppose that the latter 
means to do the work for nothing, he will be liable to pay for it. 
The doing of the work is an offer ; the permission to do it, or ac- 
quiescence in its being done, is the acceptance. The offer and ac- 
ceptance are inferred or implied as a matter of fact from the cir- 
cumstances.* 

« Morse ▼. Bellows, 7 N. H. 549, 28 Am. Dea 872; Hough wout ▼. Boisaubin, 
18 N. J. Bq. 815; Smith y. Ingram, 90 Ala. 529, 8 South. 144; Wetmore ▼. 
Mell, 1 Ohio St 26, 69 Am. Dec 607 ; Sturges y. Robblns, 7 Mass. 301 ; Train 
y. Gold, 5 Pick. (Mass.) 884; New York & N. H. R. Go. y. Plxley, 19 Barb. 
(N. Y.) 428; Porter y. Eyerts' Estate, 81 Vt 517, 71 AtL 722. Taking goods; 
impUed promise to pay for them. Stondenmlre y. Harper, 81 Ala. 242; 1 
South. 857. Sending goods in response to an order is an acceptance of the 
offer to buy contained In the order. Crook y. Cowan, 64 N. C. 743; Brlggs 
y. Sizer, 30 N. Y. 652; Haryey y. Johnston, 6 C. B. 295. Retention of the 
order, if explained, is not an acceptance. Briggs y. Sizer, 30 N. Y. 652. 
Taking possession of property in accordance with, a letter offering to sell it 
is an acceptance. Dent y. iSteamship Co., 49 N. Y. 390. See "Contracts*' 
Deo. Dig. (Key-No.) H i^. 18, 22; Cent. Dig. §| 49-^6, 71-92. 

B See Relf y. Paige, 55 Wis. 503, 13 N. W. 473, 42 Am. Rep. 731 ; Coston 
y. Morris, 51 Hun, 643, 4 N. Y. Supp. 89. See, also, post, p. 20, find notes. 
Bee **aontraot9*' Dec. Dig. {Key-Vo.) i 22; Cent. Dig. %% 82-^2. 

• Paynter y. WUUams, 1 Cromp. & M. 810 ; Day y. Caton, 119 Mass. 513, 
20 Am. Rep. 847; Huck y. Flentye, 80 III. 258; De Wolf y. City of Chicago, 
26 IlL 444 ; Hartupee y. Qity of Pittsburgh, 97 Pa. 107 ; Thomas y. Coal Co.. 
13 Mo. App. 653; Lockwood y. Robbins, 125 Ind. 898, 25 N. E. 455; Wojahn 
r. National Union Bank of Oshkosh, 144 Wis. 646, 129 N. W. 1068. No promise, 
howeyer, on the part of a person benefited by work, can be implied where 
the work was done under a special contract with another person. Walker 



g§ 14-16) COMMUNICATION BY CONDUCT — ^IMPLIED CONTBACT8 1^ 

So, also, if a person sends goods to another, not under such cir- 
cumstances as reasonably to lead the latter to suppose them a gift, 
and the latter uses or consumes them, he will be liable on an im- 
plied promise to pay what the goods are reasonably worth. The 
offer is made by sending the goods ; the acceptance, by their use or 
consumption, which is in fact a promise to pay their price.'' In 
like manner, a subscriber to a newspaper or magazine remains lia- 
ble for the subscription price so long as he takes or receives the 
publication from the post office, even though he has directed the 
publisher to discontinue it.* 

Where conduct is relied on as constituting acceptance, it must be 
something more than mere silence ; it must be silence under such 
circumstances^ as to amount to acquiescence or assent.* 

▼. Brown, 2d HL 878^ 81 Am. Dec. 287; Massachusetts General Hospital ▼. 
Fairbanks, 129 Mass. 78^ 37 Am. Rep. 803. A promise cannot be Implied 
where the whole matter Is covered by an express contract See Phelps v. 
Sheldon, 18 Pick. (Mass.) 50, 23 Am. Dec. 659; Walte y. Merrill, 4 Greenl. (Me.) 
102, 16 Am. Dec 238; Stockett y. Watkins* Adm'rs, 2 GIU ft J. (Md.) 826^ 20 
Am. Dec. 488; Wheeiock y. Freeman, 18 Pick. (Mass.) 165, 23 Am. Dea 674; 
King y. Woodruff, 23 Conn. 56, 60 Am. Dec. 625; Appleton Waterworks Go. 
▼..C»ty of Appleton, 132 Wis. 568, 113 N. W. 44. A mere expectation by one 
party to be paid for his seryices is not sufficient to constitute a contract, if 
the other party reasonably supposes them to be gratuitous. Harley y. United 
SUtes, 198 U. S. 229, 25 Sup. Ct 634, 49 L. Ed. 1029. Bee '^Oontraou;' Deo. 
Dig. (Key-No,) | t2: Cent. Dig. |§ 8t-92. 

T Hart y. MllliB, 15 Mees. & W. 87; Manor y. Pyne, 8 Bing. 288; Larkln v. 
Lumber Co., 42 Mich. 296, 8 N. W. 904; Kinney y. Railroad Co., 82 Ala. 
868, 8 South. 118; Indiana Mfg. Co. y. Hayes, 155 Pa. 160, 26 AtL 6; Empire 
Steam Pump Co. y. Inman, 59 Hun, 230, 12 N. Y. Supp. 948; Rosenfield y. 
Swenson, 45 Minn. 190, 47 N. W. /718; Hobbs y. Whip Co., 158 Mass. 194, 88 
N. E. 495. The person to whom the goods are sent must in some way deal 
with them as his own in order that an acceptance may be implied. If he 
does not choose to take them, he is not bound to return them. Pol. Cont 11. 
Where goods are ordered, and only a part are sent, the person so ordering 
need not accept them. If he does so, howeyer, he impliedly agrees to pay 
what the goods are reasonably worth. Chapman y. Dease, 84 Mich. 875; Der- 
mott y. Jones, 23 How. 220, 16 L. Ed. 442; Star Glass Co. y. Morey, lOS 
Mass. 670; Goodwin y. Merrill, 13 Wis. 658; Richards y. Shaw, 67 IlL 222. 
But see Kein y. Tupper, 52 N. Y. 550. Bee '*8ale8,** Deo, Dig. (Key-No.) ^ 22; 
Cent. Dig, H SS-iS; "^Contracts" Cent. Dig. || 71, 75. 

• Weatherby y. Borham, 5 C. ft P. 228; Fogg y. Portsmouth Atheneum, 44 
N. H. 115, 82 Am. Dec. 191; Ward y. Powell, 8 Har. (Del.) 879; Austin y. 
Burge, 156 Mo. App. 286, 137 S. W. 618. But no contractual relation arises 
from the mere receipt by one of a publication to which he has not sub- 
scribed. See cases dted supra. Bee **Contract9,'* Deo. Dig. (Key-No.) || 4, 27; 
Cent. Dig. U h^, 121-132. 

• Royal In& Co. y. Beatty, 119 Pa. 6» 12 Atl. 607, 4 Am. St Rep. 622; 0*Neal 
y. Knlppa (Tex. Sup.) 19 S. W. 1020. Bee *'Contract9,'' Deo. Dig. {Js^ey-No.} 
I 22; Cent. Dig. || 82-92. 



20 OFFEB AND ACGBPTANCB (Ch. 2 

"Implied Contracts^*— The Term Explained 

Contracts implied from the conduct of the parties are implied as 
a matter of fact, and not as a matter of law. There is, in fact, an 
agreement between the parties, though it is shown by their acts, 
and not by express words." If a man says to another in words, "I 
will sell you this article for the market price," and the latter, taking 
it, says in words, "I accept your offer, and will pay the price," there 
is an express contract, evidenced by express words. If a man 
sends another goods under such circumstances as to show that he 
expects payment, and the latter accepts and consumes the goods, 
there is an implied contract that he will pay the market price, ev- 
idenced by the conduct of the parties in sending the goods on the 
one side, and in accepting and using them on the other. Sending 
the goods is an offer to sell them, and accepting and using them is 
an acceptance of the offer. There is no difference in the two con- 
tracts except in the evidence by which the agreement is shown.^** 
The distinction between contracts implied from the conduct of the 
parties and so-called "implied contracts" which are properly "quasi 
contracts," has been explained.^' 

Same — Relationship of the Parties 

Where one person renders services for another, or supports an- 
other, the relationship of the parties is of g^eat> weight in determin- 
ing their intention. If the relationship is that of parent and child, 
even though the child has attained his or her majority, there is a 
presumption that no compensation was intended ; ^* and this ap- 
plies not only where the relationship of parent and child actually 
exists, but also where one of the parties stands in loco parentis to 
the other.** In some states the presumption that the services were 

loPoL Cont 9-11; Leake, Cont 11; HERTZOO ▼. HERTZOO, 29 Pa. 466; 
Throckmorton Cas. Contracts, 6. Bee "Oontraoii/' Deo. Dig. {Key-No,) ^ 4; 
Cent. Dig. |S J^, 

iiBizby ▼. Moor, 61 N. H. 402; Fordtran y. Stowers, 62 Tex. Cly. App. 
226, 113 S. W. 631 ; Wojahn y. National Union Bank of Oshkosh, 144 Wis. 
646, 129 N. W. 1068. Bee "* Contracts,'* Deo. Dig. (Key-No.) ^ 4; Cent. Dig. 

"Ante, p. la 

It HERTZOO y. HERTZOO, 29 Pa. 465, Throckmorton Gas. Contracts, 6 ; 
Young y. Herman, 97 N. O. 280, 1 & B. 792; Bantz y. Bants, 62 Md. 683; 
Oovran y. Musgraye, 78 Iowa, 384, 85 N. W. 496; McOaryy y. Roods, 73 Iowa, 
363, 35 N. W. 488 ; Hudson y. Hudson, 90 Oa. 581, 16 S. E. 349 ; In re Young's 
Estate, 148 Pa. 575, 24 Atl. 124 ; Howe y. North, 69 Mich. 272, 37 N. W, 213 ; 
Allen y. Allen, 60 Mich. 635, 27 N. W. 702; Grant y. Grant, 109 N. 0. 710, 14 
S. E. 90. Bee "Ewecuton and Administrators;* Dec. Dig. {Key-No.) | 221; 
Cent. Dig. ^ 901. 

i« Dodson y. McAdama, 96 N. a 149, 2 S. E. 453, 60 Am. Rep. 408; Ormsby 
T. Rhoades, 59 Vt 505, 10 AU. 722 ; Starkle y. Perry, 71 Cal. 495, 12 Pac. 508 ; 



{§ 14-16) COMMUNICATION BT CONDUCT— DCPIJZD CONTBACTB 21 

gratuitous arises only in the case of parent and child, or child and 
person standing in loco parentis.*' The presumption has frequently 
been declared to exist, however, where the parties were grandpar- 
•cnt and grandchild,*' or were brothers,*' or brother and sister.** 
And the rule as generally applied extends to all cases where the 
parties occupy a near relationship, or, although not related at all, or 
only distantly, are members of the same family, and the services 
<:onsist either in household or other family duties by one party, and 
support and maintenance by the other.** As said in a New Jersey 
•case,*' "the reason of this exiception to the ordinary rule is that 
the household family relationship is presumed to abound in recip- 
rocal acts of kindness and good will, which tend to the mutual com- 
fort and convenience of the members of the family, and are gratui- 
tously performed ; and where that relationship appears, the ordinary 
implication of a promise to pay for services does not arise, because 
the presumption which supports such implication is nullified by 
the presumption that between the members of a household services 
are gratuitously rendered." Some courts have refused to apply the 
presumption against an implied contract where the benefit is 
wholly on one side, as where one relative supports and nurses an- 
other who performs no services in return.** 

» 

Wyley t. Boll, 41 Kan. 206, 20 Pac. 866 ; Appeal of Barhite, 126 Pa. 404, 17 
AU. 617; Harris ▼. Smith, 79 Mich. 64, 44 N. W. 169, 6 L. R. A. 702. See 
^Emecutar9 and AdtninUtratort;* Deo. Dig. (Key-No.) | HI; Cent. Dig. | 901. 

IB In re Shubart's Estate, 164 Pa. 230, 26 Atl. 202. See **Bxeoutor$ and 
Administrator*,** Dec. Dig. {Key-No,) | t21; Cent. Dig. ^ 901; **Worlc and 
Labor," Dec, Dig. (Key-No.) 17; Cent, Dig. || llW-tt. 

i« Jackson's Adm*r v. Jackson, 96 Va. 166, 81 S. E. 7a See **Work and 
Labor," I>ec. Dig. (Key-No.) | 7; Cent. Dig. H llV^tt. 

IT Chapman y. Chapman, 87 IlL App. 427. See **Work and Labor,** Dec. 
Dig. (Key-No.) | 7; Cent. Dig. U 11^^22. 

i« Disbrow y. Durand, 64 N. J. Law, 348, 24 Atl. 645, 88 Am. St Hep. 678; 
Fuller V. Fuller, 21 Ind. App. 42, 61 N. B. 873. See **Work and Labor,** Dec. 
Dig. (Key-No.) | 7; Cent. Dig. U ii%-«. 

1* Disbrow y. Durand, 64 N. J. Law, 848, 24 Atl. 646, 88 Am. St Rep. 678; 
Cone y. Cross, 72 Md. 102, 19 Atl. 391 ; Curry y. Curry, 114 Pa. 367, 7 Aa 61 ; 
Felertag y. Felertag, 73 Mich. 297, 41 N. W. 414 ; Patterson y. Collar, 31 IlL 
App. 340; Collar y. Patterson, 137 IlL 403, 27 N. E. 604; Reeyes' Estate y. 
Moore, 4 Ind. App. 492, 31 N. E. 44 ; Gerz y. Weber, 151 Pa. 396, 26 AtL 82. 

WJtiere a woman married a man and liyed with him till his death, but after- 
wards learned that he had a wife llylng, held that she could not recoyer In 
an action of contract against his administrator for her serylcee In keeping 
house. Cooper y. Cooper, 147 Mass. 370, 17 N. E. 892, 9 Am. St Rep. 721. 
See '*Work and Labor,** Dec. Dig. (Key-No.) | 7; Cent. Dig. If llW-22. 

*• Disbrow T. Durand, ante, note 19. See "Executors and Administratore," 
Deo. Dig. (Key-No.) |§ 206, 221; Cent. Dig. §§ 7SS, 901. 

SI Mark's Adm'r y. Boardman (Kj.) 89 S. W. 481, 1 L. R. A. (N. B.) 819 



22 OFFBB AND ACCEPTANCB (Ch. 2 

In all cases the presumption may be overcome by evidence of an 
agreement for compensation.'* And, as said in an Indiana Case/* 
a contract will be implied, notwithstanding the relationship, where 
there is hope of compensation on one side and expectation to award 
it on the other. 

COMMUNICATION OP OFFER 

i 
16. An offer is made when it is communicated to the offeree. 

It is plain that without communication of the offer there can be 
no consensus^ and therefore no contract. 

Thus, in the case of an offer of a promise for an act, if the of- 
feree does the act in ignorance of the offer, he is not entitled to the 
benefit of the promise. It is for this reason that a person who does 
an act for which a reward is offered, in ignorance of the offer, can- , 
not claim the reward.** 

Again, if a person does work for another under such circum- 
stances that it could not reasonably be supposed that he meant to 
work for nothing, the doing of the work is an offer, and acquies- 
cence in its doing may be an acceptance. But if the offer is not 
communicated to the person to whom it is intended to be made^ 
there can be no acquiescence. 

Thus, where a person who had been engaged to command a ship 
threw up his command during the voyage, but helped to work the 

See ^'Work and Labor,** Deo. Dig. {Key-lfo.) | 7; Cent. Dig. %% It^fSt; '*Cof^ 
traotn;* Cent, Dig. | ISO. 

ts As to the BUffldency of the evidence to show that there was a contract^ 
see Pritchard ▼. Pritchard, 69 Wis. 873, 84 N. W. 506; McMiUan v. Page, 71 
Wis. 656, 88 N. W. 178; Shane v. Smith, 87 Kan. 55, 14 Pac. 477; Petty y. 
Young, 43 N. J. Bq. 654, 12 Atl. 802; Appeal of Lindsey (Pa.) 15 Atl 434; 
Doremus ▼. Lott, 49 Hun, 284, 1 N. Y. Sui^. 798 ; HiU v. HIU, 121 Ind. 255^ 

23 N. B. 87; Hogg ▼. Laster, 56 Ark. 382, 19 8. W. 975; Henzler's Eistate 
y. Bossard, 6 Ind. App. 701, 88 N. B. 217; Zimmerman y. Zimmerman, 129* 
Pa. 229, 18 AtL 129, 15 Am. St Rep. 720; Hayens y. Hayens, 50 Hun, 605, 
3 N. Y. Supp. 219; SpitzmiUer y. Fisher, 77 Iowa, 289, 42 N. W. 197; BUlg. 
y. Gary. T4 Wis. 176, 42 N. W. 252, 4 L. B. A. 55, 17 Am. St Rep. 125; Davis^ 
y. GaUagher, 55 Hun, 698, 9 N. Y. Supp. 11 ; Kirkpatrick y. Gallagher, 84 S. 
0. 255, 13 S. B. 450; McCormick y. McCormick, 1 Ind. App. 594, 28 N. B. 
122 ; Story y. Story, 1 Ind. App. 284, 27 N. B. 573 ; Stock y. Stoltz, 187 111. 849,. 
27 N. B. 604; Wayman y. Wayman (Ky.) 22 a W. 557; O'Kelly y. Faulkner,. 
92 Ga. 521, 17 S. Bw 847. Bee **Ewecutor9 and Admifiiatrators," Dec Dig, 
(Key-No.) 1 121; Cent. Dig. || 1858--1876; **Work and Labor," Deo. Dig. (Key- 
No.) I 28; Cent. Dig. || i7, 65. 

SB Huffman y. Wyrick, 5 Ind. App. 188, 81 N. B. 823. Bee ''Work and La- 
bor r Deo. Dig. {Key-No.) I 7; Cent. Dig. || 11^-^; '^Contraete,** Cent. Dig.. 
I ISO. t4 Post, p. 49. 



§ 16) COMMUNICATION OF OFFEB 23 

vessel home, and then claimed compensation for such services, it 
was held that he could not recover.** Evidence "of a recognition 
or acceptance of services," it was said, "may be sufficient to show 
an implied contract to pay for them, if at the time the defendant 
had power to accept or refuse the services;" but in this case the 
defendant never had such an option, and repudiated the services 
when he became aware of them. The offer, not having been com- 
municated to the owner of the vessel, did not admit of acceptance, 
and could give no rights against him. As said in the case men- 
tioned: "Suppose I dean your property without you knowledge, 
have I then a claim on you for payment? How can you help it? 
One cleans another's shoes; what can the other do but put them 
on? Is that evidence of a contract to pay for the cleaning? " 

Terms of Offer Partly Uncommunicated 

If an offer contains on its face the terms of a complete contract, 
the acceptor will not be bound by any other terms intended to be 
included, unless he knew those terms, or had their existence 
brought to his knowledge, and was capable of informing himself 
of their nature.** Illustrations of this frequently arise in the case 
of contracts of carriage or bailment with a railroad company or 
warehouseman, evidenced by a ticket or other, document contain- 
ing terms modifying the liability of the company or warehouse- 
man as carrier or bailee, though, of course, they may arise in the 
case of other contracts. 

The law on this point was thus stated in an English case: ''If 
the person receiving the ticket did not see or know that there was 
any writing on the ticket, he is not bound by the conditions ; if he 
knew there was writing, and knew or believed that the writing 
contained conditions, then he is bound by the conditions; if he 

*• Taylor t. Laird, 26 L. J. Ezch. 329. And see Bartholomew y. Jack- 
son, 20 Johns. (N. Y.) 28, 11 Am. Dec. 237, in which it was held that a per- 
son who remoTed another's property without the latter's knowledge, to pre- 
vent its destruction by fire, could not recover for his services, because no offer 
was ever communicated. See, also, Thornton v. Village of Sturgis, 88 Mich. 
639;.^agle v. McMurray, 84 CaL 539, 24 Pac. 107; Burrows v. Ward, 15 R. 
^ 17346, 5 AtL 5P0; Brennan v. Chapin (Com. PL) 19 N. Y. Supp. 237; Mann 
^ Y. Famum, 17 Colo. 427, 30 Pac. 332. See "CotUraots,** Dec. Dig. {Keu-No.) 
1 18; Cent. Dig. || 49^6. 

>• In order that a prospectus of a proposed publication may become a part 
of the contract of a subscriber for the work to be published, so that he may 
take advantage ^of statements contained therein, it must appear that the 
contents of the prospectus were communicated to him, so that he may be 
supposed to have been Influenced thereby. Tichnor v. Hart, 52 Minn. 407, 54 
N. W. 809. See ""CowtracU,** Deo. Dig. {Key-Vo.) l\ 18, 203; Cent. Dig. U 



24 OFFBB AND ACCEPTANCB (Ch. 2* 

knew there was writing on the ticket, but did not know or believe- 
that the writing contained conditions, nevertheless he would be 
bound, if the delivery to him of the. ticket in such a manner that 
he could see that there was writing on it, was, in the opinion 
of the jury, reasonable notice that the writing contained condi- 
tions." *^ In all cases, however, the question is the same, name- 
ly, have the terms of the offer been fully communicated to the- 
acceptor? And the tendency of judicial decision is towards a 
general rule that, if a man accepts a document which j>urports 
to contain the terms of an offer, he is bound by all the terms, 
though he may not choose to inform himself of their tenor, or 
even of their existence.** 

Same — Oifer Under Seal 

It has been said that an offer under seal constitutes an excep- 
tion to the inoperative character of an uncommunicated offer». 
at least to the extent that the party making an offer in this 
form is bound to leave it open until the other party has had an 
opportunity to accept or reject it. This doctrine, however, is^ 
based on a mistaken conception of the nature and effect of a 
deed or instrument under seal. And an offer under seal is no- 
^xception to the general rule that an offer is wholly without 

sv Parker r. RaUway Go., 2 0. P. Dir. 423. See, also, Richardson t. Roun- 
tree [18M] App. Gas. 217; The Majestic, 166 U. S. 875, 17 Sap. Ot 697, 41 
r^ Ed. 1039. Where a ticket by steamer from DubUn to Whitehayen contained 
on its face only the words, "Dublin to Whitehaven," it was held that the pur- 
chaser was not bound by conditions on the back of the ticket, which he had* 
not Seen, since the ticket was a complete contract on its face. Henderson^ 
V. Stevenson, L. R. 2 H. L. 470. 

On the other hand, where a ticket had written on its face the words, ''Sub- 
Ject to the conditions on the other side," and the person t<» whom it was- 
issued admitted knowledge that there were conditions, but said >.e had not 
.read them, the conditions contained on the back were held binding notwith- 
standing they were not read. Harris y. RaUway Co., 1 Q. B. DiT. 516. 

In another case the ticket contained on its face the words, "See back," and^ 
the person to whom it was giren admitted knowledge of writing on the 
ticket, but denied all knowledge that the writing contained conditions. It 
was held that he was bound by the conditions if the jury were of opinion* 
'that the ticket amounted to a reasonable notice of their existence. Parker 
T. Southeastern Ry. Co., supra. Bee "(7-orHer«," Dec. Dig, (Key-No,) || €2, 
153; Cent. Dig. ff 195-^06^^ 687-^90. 

St Burke T. RaUway Co., 6 C. P. Div. 1; Watkins t. RymiU, 10 Q. B. Dly. 
178; McClure ▼. Railroad Co., 34 Md. 632, 6 Am. Rep. 345; Johnson y. Same,. 
63 Md. 106; Boylan t. Railroad Co., 132 U. S. 146, 10 Sup. Ct 50, 33 L. 
Ed. 290; Durgin ▼. Express Co., 66 N. H. 277, 20 AtL 328, 9 L. R. A. 453; 
Davis T. Railroad Co., 66 Vt 290, 29 Atl. 313, 44 Am. St Rep. 852 ; Fonseca- 
T. Steamship Co., 158 Mass. 553, 27 N. E. 665, 12 L. R. A. 340. 25 Am. St 
Rep. 660; Schaller y. Railway Co., 97 Wis. 31, 71 N. W. 1042. But some- 



$ 17) KBOBSSITT AND EFFECT OF ACOBPTANOB ^ 

effect until communicated. There c an be no contract without 
mutual assent; a nd_how_.may a party assent to that which has 
never been communicated to him ? •• 



/ 



NECESSITY AND EFFECT OF ACCEPTANCE 



17. An offer before it will become a binding promise must be ac- 
cepted. 

It is the universal rule that an offer must be accepted before it 
will become a binding promise, and result in a contract.*® This 
rule springs from the very nature of contract. as involving the 
element of agreement.** An unaccepted offer, therefore, cannot 
create any rights, or bind the party piaking it to the party to 
whom it is made. A fortiori, it cannot bind the party to whom 

•eonrts hold that, where a contract Umiting the common-law liability of the 
carrier is contained in a bill of lading, the burden is pn the carrier to show 
that the limitations were assented to. See Bfichigan Cent R. v. Manufacturing 
Co., 16 Wall. 318, 21 L. Ed. 297; 9 Oyc. Law & Proc. 263. One who accepts 
a document reasonably purporting to be a mere check or. voticher, and not 
a contract, without knowledge of stipulations contained in it, does not assent 
to such stipulations. Malone y. Railroad Corp., 12 Gray (Mas&) 388» 74 Am. 
Dec. S98. See Fonseca y. Steamship Co., supra. See **Oarrier$," Deo. Dig, 
iKey-Ifo,) U ^^, i^S; Cent. Dig. || 195^206\i, 687-^90. 

>• As to whether an offer under seal, which has been communicated, may 
be reyoked, see post, 40. 

BO PBBSCOTT y. JONES, 69 N. H. 905, 41 AtL 852, Throckmorton Cas. Con- 
tracts, 10 [dt Clark on Contracts]; Payne y. Caye, 8 Term B. 148; Tuttle 
y. Loye, 7 Johns. (N. Y.) 470; Tucker y. Woods, 12 Johns. (N. Y.) 190, 7 Am. 
Dec 305 ; First Nat Bank y. Hall, 101 U. S. 43, 25 L. Ed. 822 ; McKinley v. 
Watkins, 13 111. 140; Bruce y. Bishop, 43 Vt 161; Wdden y. Woodruff, 38 
Midi. 130; Brown y. Rice, 29 Mo. 322; Belfast & M. L. R. Co. y. Inhabitants 
of Unity, 62 Me 148; Bower y. Blessing, 8 Serg. & R. (Pa.) 243; King y. 
Warfleld, 67 Md. 246, 9 Aa 539, 1 Am. St. Rep. 384 ; Missouri Pac. By. Co. y. 
Railway Co. (C. C.) 81 Fed. 864 ; Etheredge y. Barkley, 25 Fla. 814, 6 South. 
861; Hodges y. Sublett, 91 Ala. 688, 8 South. 800; Graff y. Buchanan, 46 
Minn. 254, 48 N. W. 915; Bronson y. Herbert, 95 Mich. 478, 55 N. W. 359 
McCormlck Haryesting Mach. Co. y. Richardson, 89 Iowa, 525, 56 N. W. 682 
State y. Board of Public Seryice of Columbus, 81 Ohio St 218, 90 N. E. 389 
Wm. J. Lemp Brewing Co. y. Secor, 21 Okl. 537, 96 Pac. 636. See "'Contracts,' 
Deo. Dig. (Key-No.) | 16; Cent. Dig. {{ 71-St. 

•^Ante, p. 8. Suppose A. makes an offer by letter to B. to sell him cer- 
tain goods at a certain price, and B., not knowing of the offer, makes an 
offer by letter to A. to buy the goods at that price, and the letters cross each 
other. This is not sufficient to constitute a contract, for there is no acceptance 
by either of the other's offer, though it may be said that the minds of the 
parties are ad idem. See Tinn t. Hoffman, 29 L. T. (N. S.) 27L See ""Con- 
Procter Dec Dig. (Key-No.) ^ 16; Cent, Dig. H 71^2. 



26 OFFBB AND ACCEPTANCB (Ch. 2 

It is made.** "A contract," it has been said by Pothier, "includes 
a concurrence of intention in two parties, one of whom promises 
something to the other, who, on his part, accepts such promise. 
A pollicitation is a promise jiot yet accepted by the person to 
whom it is made. Pollicitatio est solius oiferentis promissum. 
A pollicitation, according to the rules of mere natural law, does 
not produce what can be properly called an obligation; and the 
person who has made the promise may retract it any time before 
it is accepted; for there cannot be any obligation without a 
right being acquired by the person in whose favor it is contracted 
against the party bound. Now, as I cannot, by the mere act of 
my own mind, transfer to another a right in my goods, without 
an intention on his part to accept them, neither can I by my 
promise confer a right against my person, until the person to . 
whom the promise is made has, by his acceptance of it, con- 
curred in the intention of acquiring such right." •• 

An offer, as we shall presently seCj can_be revoked at aQy_time 
before acceptanQe. Acceptance, whether by words or by con- 
duct, supplies the^element of agreement, which binds the party 
making it to a fulfillment of its terms.** It changes the char- 
acter of the offer, and makes it a pron^ise.*' 

•s Stensgaard v. Smith, 43 Minn. 11, 44 N. W. 669, 19 Am. St Rep. 205; 
Melchers v. Springs, 33 S. C. 279, U S. B. 788. See '^OontracU** Dee. Diff. 
(Key-No.) f 16; Cent. Dig. ff 71-92. 

ss Poth^ Obi. p. 1, c. 1, 1 1, art. Z 

«4 Harris' Case, Lu R. 7 Ch. App. 687; Thruston ▼. Thornton, 1 Cash. 
(Mass.) 91 ; Bowen v. Tipton, 64 Md. 275, 289, 1 Ati. 861 ; Equitable. Endow- 
ment Ass*n y. Fisher, 71 Md. 430, 18 Atl. 803; Fried ▼. Insurance Co., 50 N. 
Y. 243; White v. Baxter, 71 N. Y. 254; Hamilton v. Insurance Co., 6 Pa. 839; 
Wheeler v. Railroad Co., 115 tJ. S. 29, 5 Sup. Ct 1061, 1160, 29 L. Ed. 341; 
Hawkinson v. Harmon, 69 Wis. 551, 85 N. W. 28 ; Wilcox v. Cline, 70 Mich. 
517, 38 N. W. 555 ; Merchant v. O'Rourke, 111 Iowa, 351, 82 N. W. 759. A 
bid at an auction sale is accepted when the hammer is struck down, and 
the contract is then complete. Payne v. Cave, ,3 Term R. 148; Blossom y. 
Railway Co., 3 WaU. 196, 18 L. Ed. 43 ; Ires v. Tregent, 29 Mich. 390. Where 
an offer is made containing conditions, an acceptance without qualification 
is an acceptance of the conditions, and makes a binding contract Laurence 
▼. RaUway Co., 84 Wis. 427, 64 N. W. 797. See ''Contracts,** Deo. Dig, (Key- 
So,) I 22; Cent. Dig. U 82-92, 104-108. 

s» See Gartner ▼. Hand, 86 Qa. 558, 12 S. E. 87& See '^Contraeti,** Dee. 
Dig. (Key-No.) | t2; Cent. Dig. U 82-92, lOk-108. 



§§ 18-20) ' OOHHUNICATION OF ACCEPTANOB 27 



COMMUNICATION OF ACCEPTANCE 

18. Where the offer contemplates the performance of or ^foii>ear- 

ance from an act as the consideration of the promise of 
the offeror, the performance or forbearance is an accept- 
ance, unless the offeror expressly or impliedly prescribes 
that the acceptance must be communicated. 

19. Where the offer contemplates a promise as the consideration 

of the promise of the offeror, communication of the accept- 
ance is essential, unless the offer contemplates that the 
performance of some overt act manifesting an intention to 
accept shall be an acceptance, in which case performance 
of the act is an acceptance. 

20. Where the offer contemplates the dispatch of an acceptance by 

means beyond the acceptor's control, as by post, telegraph, 
or the offeror's messenger, an acceptance so dispatched 
is effective from tht tirBf ^^ dispatch, unless the offeror 
makes the formation of the contract dependent upon actual 
conununication to himself. 

It is frequently said that it is essential to the formation of a con- 
tract that the acceptance be communicated, but, as already inti- 
mated, such is far from being the fact. It is, indeed, true that 
acceptance must be njiore than mere mental assent.** Where, 

••WHITB V. CORLIES; 46 N. Y. 467, Throckmorton Cas. Contracts, 1; 
Felthouse ▼. Bindley, 11 C. B. (N. S.) 869; Hebb'g Case, L. R. 4 Eq. 9; Brogden 
▼. Railway Co., lu IL^ App. Cas. 691; Stitt ▼. Huidekoper^ 17 WalL 385, 21 
L. Ed. 644 ; Mactier's Adm'rs ▼. Frith, 6 Wend. (N. Y.) 103, 21 Am. Dec. 262 ; 
Van Valkenburg v. Rogers, 18 Mich. 180; Strasbnrg R. Co. v. Echtemacht, 
21 Pa. 220, 60 Am. Dec. 49; Ueberroth y. Rlegel, 71 Pa. 280; Beckwith v. 
Cheever, 21 N. H. 41; Trounstine ▼. Sellers, 35 Kan. 447, 11 Pac 441; Oilman 
▼. Kibler, 6 Humph. (Tenn.) 19; Stuart ▼. Railroad Co., 32 Grat (Va.) 146; 
Johnson ▼. Jacobs, 42 Minn. 168, 44 N. W. 6; Cozart ▼. Hemdon, 114 N. C. 
252, 19 S. E. 15a 

In Lancaster ▼. Elliott, 28 Mo. App. 86, it was held that a proposal by de- 
fendant to relinquish certain rights against plaintiff was not accepted by 
writing on the proposal the word ''Accepted,*' and depositing in bank a sum 
of money to be applied as required by the proposal, -where both the proposal 
and the d<^posit remained under plaintiff's control. 

Where an order for goods is given to an agent of the manufacturer, a 
letter from the latter to the agent, without any notice to the person who gave 
Che order, is not an acceptance, so as to render the order binding. Harvey v. 
Dnffey, 99 CaL 401, 33 Paa 897. And so an application for an insurance 
policy, given to an agent of the company and by him forwarded to the com- 
pany, and the issuance and transmission of the policy to the agent, does 
not establish a contract of insurance without communication of acceptance 



28 OFFBlIt AND ACCBPTANCB (Ch. 2 

for instance, a person by letter offered to buy another's horse for 
a certain price, adding, "If I hear no more about him, I consider 
the horse is mine at" that pri(fe, and no' answer was returned, it 
was held that there was no contract, and this, though it appeared 
that the person to whom the offer was sent had made up his mind 
to accept, and had stated to a third person that the horse was- 
sold.'^ A person making an offer may indicate some overt act 
the performance of which shall be a sufficient manifestation of 
acceptance, but the statement to a third person that the horse 
was sold was hot such an ^ct, and the silent assent of the offeree 
was not an acceptance. 

Offer of Promise for Act 

Whether or not communication of the acceptance is essential to- 
the formation of a contract must depend upon the nature and terms 
of the offer; that is, upon whether the offeror proposes to be bound 
upon the performance of an act by the offeree, or upon his com- 
munication of his acceptance of the offer. "Where a person in an 
offer made by himself to another person expressly or impliedly 
intimates a particular mode of acceptance as sufficient to make 
the bargain binding, it is only necessary for the other person 
* ♦ ♦ to follow the indicated mode of acceptance; and if the 
person making the offer expressly or impliedly intimates in his 
offer that it will be sufficient to act on the proposal without com- 
municating acceptance of it to himself, performance of the con- 
sideration is «a sufficient acceptance without notification."** If 
the offer contemplates the doing or forbearance from the doing 
of an act as the consideration of the promise of the offeror, unless 
the offer prescribes communication, the mere performance of the 
consideration completes the contract.** Thus, if a person orders 
goods of a merchant, who ships them pursuant to the order, the 

m 

to the applicant Busher v. New Tork Life Ins. Co., 72 N. H. 551, 58 Atl. 41. 
See ''Contracts,'* Deo. Dig. (Key-No.) f 22; Cent. Dig. H 82-^2, lOk-108, 

<7 Felthouse v. Bindley, snpra. See, also, to the same effect, PRESCOTT y. 
JONES, 69 N. H. 305, 41 AU. 852, Throckmorton Ga& Contracts, 10 [cit Clark 
on Contracts]. Bee '* Contracts,'' Dec. Dig. (Key-No.) § 22; Cent. Dig. {{ 82^ 
92, m-108. 

S8 Carlill y. Smoke-BaU Co. (18d3) 1 Q. B. 256. See **ContraeU/* Deo. Dig. 
(Key-No.) i 22; Cent. Dig. §| 82^2, lOk'108. 

«• Brogden y. Railway Co., L. R. 2 App. Cas. 681 ; First Nat Bank y. Wat- 
kins, 154 Mass. 385, 28 N. E. 275 ; Lennox y. Murphy, 171 Mass. 370, 50 N. 
B. 644. WhUe a^ party making an offer may specify how it shall be accepted, 
in order to complete the contract, yet, If he does not so specify, anything 
which in law would be an acceptance Is sufficient Mott y. Jackson, 172 Ala. 
448, 55 South. 52& Bee ^'Contracts,'* Dec Dig. (Key-Noi % 22; Cent. Dig. 
11 22-32, m-108. 



g§ 18-20) COMMUNICATION OF AOCEFTANOB 29 

contract of sale is complete upon the shipment ; *• and if a per- 
son offers a reward for the return of lost articles, or for infor- 
mation, the contract is complete upon transmission of the articles 
or the information to the offeror.** So, as we have seen, if a 
person asks another to work for him, unless a particular form of 
acceptance is prescribed, the latter may accept the offer simply 
by performing the service ; *' and if a person sends goods to 
another, who uses them, he is liable to pay for them.** Yet, even 
where the offer is of a promise for an act, the offeror may, of 
course, make communication of acceptance a condition of the for- 
mation of a contract 

Offer to Guaranty Future Advances 

An apparent exception to the rule that performance of the act 
without notification of acceptance completes the contract is found 
in the cases which hold that an offer to guaranty future advances 
to be made or credit to be extended to a third person, and the like, 
does not ripen into a contract upon the making of the advances 
or extending the credit, but that notice of acceptance by the 
guarantee is essential.** These cases have been put upon the 
untenable ground that the acceptance of the offeree must be 
signified to the offeror to make a binding contract, 'and also upon 
the ground that the requirement of notice is reasonable, as en- 
abling the guarantor to know the nature and extent of his liability, 
to guard himself against losses which might otherwise be unknown 
to him, and to avail himself of appropriate means to compel the 
other parties to discharge him from future liabilities.** The doc- 
trine is recognized as an exception to the rule governing ordinary 
contracts and is said to be implied in contracts of guaranty either 
by reason of the custom of merchants or by the inherent nature 

««Flncb y. Mansfield, 97 Mass. 89; Smith v. Edwards, 156 Mass. 221, 30 
N. E. 1017; Kelsea y. Manufacturing Ck>., 00 N. J. Law, 820, 26 Atl. 907, 22 
Lu R. A. 415; Bolt v. Maybln, 52 Ala. 252; Sarbecker v. State, 65 Wis. 171, 
26 N. W. 541, 56 Am. Rep. 624. See Brogden t. Railway Ck>., 2 App. Cas. 666. 
Bee "CantraeU,'' Deo. Dig. {Key-No.) i 22; Cent. Dig. §| 82-^2, m-^lOS. 

*i Post, p. 47. *« Ante, p. 18. *« Ante, p. 19. 

«« Edmondston y. Drake, 5 Pet. (U. S.) 624, 8 L. Ed. 251 ; Adams, Cunning- 
ham & Go. y. Jones, 12 Pet 207, 9 L. Ed. 105S; Dayis y. WeUs, 104 U. S. 159, 
26 L. Ed. 686; Dayis Sewing Machine Ck>. y. Richards, 115 U. S. 524, 6 Sup. 
Ct. 173, 29 L. Ed. 480 ; Acme Mfg. Co. y. Reed, 197 Pa. 359, 47 Atl. 205, 80 
Am. St ReiK 832; De Cremer y. Anderson, 113 Mich. 578, 71 N. W. 1090; 
German Say. Bank y. Roofing Co., 112 Iowa, 184, 83 N. W. 960, 51 L. R. A. 
758, 84 Am. St Rep. 335 (full citation of cases). See "Quarantu,** Deo. Dig. 
(Kev-No.) ^i 6^ 7; Cent. Dig. §§ 8, 9. 

4sDayiii y. Wells, supra. See "^Ouaranty," Deo. Dig. {Key-Jfo.) §§ 0, 7; 
Cent. Dig. |§ 8, 9. 



30 OFFBB AND ACCEPTANCE (Ql. 2 

of the transaction.** Even where applied, however, it is subject 
to certain limitations.*' And it is wholly rejected in England *• 
and in certain jurisdictions in this country,** in which it is held 
that performance of the act, st;ch as an advance of money, which 
was to constitute the consideration for the promise, is a sufficient 
acceptance of the offer.** 

Offer of Promise for a Promise 

On the other hand, where the offer contemplates a promise as 
the consideration of the promise of the offeror, it is obvious that 
words or conduct upon the part of the offeree indicating to the 
former an agreement to be bound is essential, or at least that the 
offeree must "indicate his intention to be bound by some overt act, 
not necessarily an act brought to the knowledge of the offeror, 
but an act which, from the nature and terms of the offer, must 
have been contemplated by the offeror as an acceptance. Thus, 
where the defendants wrote to the plaintiff, who had furnished 
an estimate for fitting up Jtheir offices, \"Upon an agreement to 
finish the fitting up ♦ ♦ ♦ in two weeks from date, you can 
begin at once," but countermanded the off^r after the plaintiff 
had bought lumber and begun work thereon, it was held error 
to charge the jury that the plaintiff need not indicate to the 
defendants his acceptance of their offer and that the purchase 
of the stuff and working on it after receiving the note made 

4« Bishop ▼. Eaton, 161 Mass. 496, 37 N. E. 665, 42 Am. St Rep. 437. See, 
also, Lennox y. Murphy, 171 Mass. 370, 50 N. E. 644. See "Guaranty,** Dec. 
Dig. (Key-No.) f§ 6, 7; Cent. Dig. §§ 8, 9. 

*T Davis V. Wells, ante. See ''Onaranty,** Deo. Dig. (Key-No.) |§ 6, 7; Cent. 
Dig. U 8, 9. 

«8 15 Halsbury's Laws of Eng. 449. And see Pope ▼. Andrews, 9 Gar. & 
P. 664 ; Morrell v. Cowan, 7 Ch. D. 151. See "Guaranty,** Dee. Dig. (Key-No.) 
§1 6, 7; Cent. Dig. §§ 8, 9. 

*» Wilcox V. Draper, 12 Neb. 138, 10 N. W. 579, 41 Am. Rep. 763; Llninger 
& Metcalf Co. v. Wheat, 49 Neb. 567, 68 N. W. 941 ; Farmers' & Mechanics' 
Bank v. Kercheval, 2 Mich. 504 ; Crittenden v. Flske,' 46 Mich. 70, 8 N. W. 
714, 41 Am. Rep. 146; Powers v. Bumcratz, 12 Ohio St 273; (cf. Wise v. 
Miller, 45 Ohio St 388, 14 N. E. 218); Douglass v. Howland, 24 Wend. (N. 
T.) 35; Union Bank t. Coster's Ex'rs, 3 N. Y. 203, 53 Am. Dec. 280; Caton 
V. Shaw, 2 Har. & G. (Md.) 13; Bright v. McKnight, 1 Sneed (Tenn.) 158; 
2 Am. Lead. Cas. 106 et seq. See, also, Manry v. Waxelbaum Co., 108 Ga. 
14, 33 S. E 701. See "Guaranty," Deo. Dig. (Key-No.) S§ 6, 7; Cent. Dig. f{ 
8, 9. 

BO For full discussion, see 5 Col. L. Rev. 215, article by W. P. Rogers, In 
which it is said: **An examination of the cases below conyinces one that the 
rule requiring notice when the debt is future, as announced by the Supreme 
Court of the United States, is losing its hold, at least in the states from which 
these cases are cited"— citing cases from Ohio, New York, Iowa, Virginia, 
Indiana, Kansas, Michigan, and New Hampshire. 



§§ 18-20) OOMMUNICATION OF AOOBFTAKCB 81 

a binding contract.'* The offer contemplated the plaintiffs prom- 
ise or agreement to finish in two weeks as an acceptance, and there 
was Nothing in his conduct that indicated to the defendants . his 
agreement to perform. The offeror may, however, indicate some 
act by which the offeree may manifest his intention to be bound, 
the performance of which, without actual communication, shall 
be sufficient as an acceptance, and when the offeree has thus 
indicated his intention the contract is complete. It seems that 
the rule which prevails in regard to contracts by correspondence 
must rest upon this ground.*' 

CofUmct by Correspondence 

It is now settled that the acceptance in case of contract by 
correspondence where an answer is invited by post is complete 
as soon as the letter of acceptance is dispatched.** Where an 

•iWHITB y. CORLIES, 46 N. Y. 467, Throckmorton Ca& Oontracta, 1. 
See **CofUraot$;' Dec. Dig. (Key-No.) | £2; Cent. Dig. U 8Z-9B, 10Jhl08. 

SI «i bave always believed the law to be this, that when an offer Is made 
to another party, and in that offer there is a request, expressed or implied, 
that he must slgnlty his acceptance by doing some particular thing, then as 
soon as he does that thing he is bound. If a man sent an offer abroad say- 
ing, 'I wish to know whether you will supply me with goods at such and such 
a price, and if you agree to that you must ship the first cargo as soon as 
you get this letter,' there can be no doubt that as soon as the cargo was 
shipped the contract would be complete, and if the cargo went to the bot- 
tom of the sea it would go to the bottom of the sea at the risk of the or- 
derer. So, again, where, as in the case of Ex parte Harris, In re Imperial 
Land Ck>mpany of Marseilles, Law Rep. 7 Gh. App. 687, a person writes a 
letter and says, 'I offer to take an aUotment of shares,' and he expressly or 
impUedly says, 'If you agree with me, send an answer by the post,' there, as 
soon as he has sent that answer by the post, and put it out of his control, 
and done an extraneous act which clinches the matter, and shows beyond all 
doubt that each side is bound, I agree the contract is perfectly plain and 
dear." Brogden y. Railway Co., 2 App. Cas. 6C6, 691, per Lord Blackburn. 
See "Contraeti," Dec. Dig. (Key-No.) S 22; Cent. Dig. S{ 82-9«, 10^-108. 

ss Adams r. Lindsell, 1 Barn. & Aid. 681; Potter y. Sanders, 6 Hare, 1; 
Levy ▼. Cohen, 4 Ga. 1 ; Tayloe v. Insurance Co., 9 How. 390, 13 L. Ed. 187 : 
ATerill y. Hedge, 12 Conn. 424; Vassar v. Camp, 11 N. Y. 441; Darlington 
Iron Co. T. Foote (C. C.) 16 Fed. 646; Thomson y. James, 18 Dunl., B. & M. 
1; MINNESOTA LINSEED OIL CO. y. LEAD CO., 4 Dill. 431, Fed. Cas. 
No. 9,635, Throckmorton Cas. Contracts, 24; Mactier's Adm'rs y. Frith, 6 
Wend. (N. Y.) 103, 21 Am. Dec. 262; Harris' Case, L. R. 7 Ch. 587; Trevor 
y. Wood, 86 N. Y. 307, 93 Am. Dec. 511; Wheat y. Cross, 31 Md. 99, 103, 
1 Am. Rep. 28; Ferrier y. Storer, 63 Iowa, 484, 19 N. W. 288» 50 Am. Rep. 
752 ; Stockham y. Stockham, 32 Md. 196 ; Moore y. Pierson, 6 Iowa, 279, 71 
Am. Dec 409; Perry y. Iron Co., 15 R. I. 380, 6 AtL 632, 2 Am. St Rep. 902; 
Calhoun y. Atchison, 4 Bush (Ky.) 261« 96 Am. Dea 299; Hamilton y. In- 
surance Co., 5 Piv 339; Abbott y. Shepard, 48 N. H. 14; Hunt y. Higman, 
70 Iowa, 406, 80 N. W. 769 ; Kempner y. Cohn, 47 Ark. 519, 1 S. W. 869, 5$ 
Am. Rep. 776; Cobb y. Foree, 88 lU. App. 255; Burton y. United States, 202 



32 OFFBB AND ACOBPTiiNCa (Ql- 2 

offer is made by post it may be assumed that an answer by post 
is invited unless the contrary is indicated, but the rule, is not 
necessarily confined to cases where the offer is mkde in that 
manner. "Where the circumstances are such that it must have 
been within the contemplation of the parties that, according to 
the ordinary usages of mankind, the post might be used as a 
means of communicating the acceptance of an offer, the accept- 
ance is complete as soon as posted."^'* The rule has not been 
established without vigorous dissent.'' 

There was at first some hesitation in applying this rule in cases 
where the letter of acceptance was lost or delayed in transmis- 
sion; but it is now settled by the great weight of authority that, 
when an acceptance has been posted, the contract is complete, 
and cannot be affected by the subsequent fate of the letter.*' "The 

U. 8. 844, 26 Sup. Gt 688, 60 L. Ed. 1057, 6 Ann. Cas. 362, and note; Scot- 
tish-American Mortg. Ck>. T. Davis (Tex. Civ. App.) 72 S. W. 217. Ck>ntra, 
McGuIlocfa V. Insarance Co., 1 Pick. (Mass.) 278 (but see Brauer v. Shaw, 168 
Mass. 198, 46 N. E. 617, 60 Am. St Rep. 387). But communication of accept- 
ance to the offeror's agent is not sufficient, even where it is accompanied by 
a direction to give notice. New v. Germania Fire In& Co., 171 Ind. 33, 85 
N. E. 708, 131 Am. St Rep. 245. Bee ^'Contracts,** Dec. Dig, (Key-No.) f 26; 
Cent. Dig. U 119, ItO. 

B^Henthom v. Fraser, [1892] 2 Ch. 27, per Lord HerschelL Bee '^Conr 
tracts:' Dee. Dig. {Key-No.) S 26; Cent. Dig. || 119, 120. 

••See dissenting optaion of Bramwell, L. J., in HOUSEHOLD INS. CO. v. 
GRANT, 4 Exch. Div. 221, Throckmorton Ca& Ck)ntracts, 12; British & 
Am. TeL Co. v. (Poison, L. R. 6 Exch. 108; McChilloch v. Insurance Co., 1 
Pick. (Mass.) 278; Langdell, Sum. Cont U 14, 15; Parsons, Cont (8th Ed., 
WUliston) ^484, note L 

There Is much force in the argument that communication is essential to 
the counter promise which Is the consideration, and that hence the accept- 
ance cannot take effect until its receipt Moreover, granting that the offeror 
must be taken to have contemplated that the post may be used as a means 
of communicating the acceptance^ it is its communication, and not the mere 
putting it in course to be communicated, which he practically contemplates. 
It is a somewhat violent assumption to attribute to him any different inten- 
tion than that which would be expressed by making the offer conditional 
upon receipt of the acceptance, which would be enforced. See **Contract8:* 
Dec. Dig. {Key-No.) § 26; Cent. Dig. ff 119, 120. 

»« HOUSEHOLD INS. CO. v. GRANT, 4 Exch. Div. 221, Throckmorton 
Cas. Contracts, 12; 'Mactier's Adm'rs v. Frith, 6 Wend. (N. Y.) 103, 21 Am. 
Dec. 262 ; Tayloe v. Insurance C^., 9 How. 390, 13 L. Ed. 187 ; Washburn v. 
Fletcher, 42 Wis. 152; Vassar v. (3amp, 11 N. Y. 441; Dunlop v. Higglns, 1 
H. L. Cas. 381; Bryant v. Booze, 55 Ga. 438; Howard v. Daly, 61 N. Y. 3G2, 
19 Am. Rep. 285 ; Duncan v. Topham, 8 C. B. 225 ; Chytraus v. Smith, 141 
IlL 231, 30 N. B. 450; College Mill Co. v. Fidler (Tenn. Ch.) 58 S. W. 382. 
See, contra, British & Am. Tel. C^. v. Colson, L. R. 6 Exch. 108, disapproved 
in Harris* Case, supra. Bee **Contract8,^ Deo. Dig. {Key-No.) | 26; Cent. 
Dig. f§ 119, 120. 



§§ 18-20) OOMMUKICATION OF AOOEFTANGB 83 

acceptor," it has been said, "in posting the letter has 'put it out 
of his control, and done an extraneous act which clinches the 
matter, and shows beyond all doubt that each side is bound.' 
How, then, can a casualty in the post, whether resulting in delay — 
which in commercial transactions is often as bad as no delivery — 
or in nondelivery, unbind the parties or unmake the contract?""^ 
The rule is the same where the telegraph is properly used as the 
mode of signifying acceptance, and the contract is complete oh 
delivery of the message to the telegraph company/* This rule, 
of course, does not apply where the offer expressly or by impli- 
cation stipulates that the contract is to be complete, and the offer 
binding, when the acceptance is received. In such a case the mail- 
ing of the acceptance is not enough.** 

To constitute an acceptance, however, the letter must be actually 
and properly posted. If it is delivered to an agent of the acceptor, 
and he neglects to mail it, or to a postman not authorized to 
receive letters, or if it is posted without a stamp, or improperly 
addressed, it is not an acceptance.** 

In England, where the doctrine was first established* that the 
mailing of a letter of acceptance makes the contract, a letter 
passes beyond the control of the sender when it is mailed; and 
such was formerly the case in this country. Under the present 
regulations of the United States Post Offic^ Department,*^ how- 
ever, the sender may, upon proper identification, reclaim the letter 
from the office at which it has been mailed, or even require the 
postmaster at such office to telegraph to the office to which it 

•TBOUSBdOLD INS. CO. ▼. GRANT, 4 Exch. Div. 221, Throckmorton 
Oas. Contracts, 12. See "Contruets,** Dee. Dig. {Key-No.) | 26; Cent. Dig. ff 
119, 120. 

•• MINNESOTA LINStilED OIL CO. v. LEAD CO., 4 Dm. 431, Fed. Cas. 
No. 9,635, Throckmorton Cas. Contracts, 24; Trevor ▼. Wood, 36 N. Y. 307, 
83 Am. Dec. 611; Brauer v. Shaw, 168 Mass. 198, 46 N. E. 617, 60 Am. St 
Rep. 387. See **C(mtraci$,** Dec. Dig. {Key-No.) $ 26; Cent. Dig. §S 119, 120. 

s* Vassar y. Camp, 11 N. Y. 441 ; Lewis t. Browning, 130 Mass. 173 ; Haas 
T. Myers, 111 m. 421, 53 Am. Rep. 634. See "Contracts,'' Dec. Dig. {Key- 
No.) I 26; OmU. Dig. U 119, 120. 

•0 Henderson v. Coke Co., 140 U. S. 25, 11 Sup. Ct 691, 35 L. Ed. 332; 
Maday v. Harvey, 90 IlL 525, 32 Am. Rep. 35; Blake v. Insurance Co., 67 
Tex. 160, 2 S. W. 368, 60 Am. Rep. 15; In re London &, N. Bank [1900] 1 
Ch. 220. Deposit of a letter in a street letter box is equivalent to deposit in 
the post office. Wood v. Callaghan, 61 Mich. 402, 28 N. W. 162, 1 Am. St. 
Rep. 597. "While constructive notice of acceptance is permitted to take the 
place of actual conununication in such cases, still the law requires that the 
message of acceptance shall pass beyond the recall or control of the accep- 
tor." Buaher v. New York Life Ins. Co., 72 N. H. 551, 58 Aa 4L See ''Con- 
tracts^ Dee. Dig. {Key-No.) | 26; Cent. Dig. Sf 119, 120. 

•1 U. & Post Office Regulations, (1913 Ed.) H 552, 553. 

QhAXK Co?it.(3d Ed.) — 3 



34 OFFER AND ACCBPTANCB (Ch. 2 

is addressed, directing its return, if undelivered. Since, therefore, 
a letter does not pass beyond the control of the sender until it 
is delivered, a question has arisen as to whether the mere posting 
of the ictter constitutes an irrevocable acceptance.** In accord- 
ance with the general rule, however, it has been held that it does, 
and that s contract exists from the moment of mailing the letter, 
notwithstanding that it is reclaimed from the mails by the sender.** 



CHARACTER, MODE, PLACE, AND TIME OF ACCEPT- 
ANCE 



21, The acceptance of an offer to result in a contract must 

(a) Absolute and unconditional. 

(b) Identical with the terms of the offer. 

(c) In the mode, at the place, and within the time expressly or 

impliedly required by the offer. 

The acceptance of an offer must be absolute, and identical with 
the terms of the offer; or, as it has been expressed, ''an acceptance 
to be good must in every respect meet and correspond with the of- 
fer, neither falling within nor going beyond the terms proposed, 
but exactly meeting them at all points and closing with them just 
as they stand." ** Unless this is so, there is no meeting of minds 

•s 9 Oyc. 297. In tbe English case of Ex parte Cote, L. R. 9 Ch. 27, it was 
held that the posting of a letter in France, where it was subject to be re- 
claimed by the sender until its dispatch from the office of transmission, did 
not transfer title to certain bills of exctiange inclosed. But in Canterbury 
V. Sparta, 91 Wis. 53, 64 N. W. 311, 30 L. R. A. 845, 61 Am. St Rep.. 870, 
upon a very similar state of facts, the sender was held liable to the extent 
of an inclosed draft, even though he had reclaimed it from the post office 
authoritieB. And see, also, McDonald t. Chemical Nat Bank, 174 U. S. 610, 
19 Sup. Ct 787, 43 L. Ed. 1106 ; Crown Point Iron Co. v. ^tna Ins. Co., 127 
N. Y. 608, 28 N. B. 653, 14 L. R. A. 147. Bee **Contract8;' Deo. Dig. {Key- 
No.) I 26; Cent. Dig. §| 119, 120. 

•8 Scottish-American Mortgage Co. v. Davis (Tex. CIt. App.) 72 S. W. 217 
(quoting with approval the statement of Vredenburgh, J., in Hallock v. Ins. 
Co., 26 N. J. Law, 268, 280, that "the acceptor can no more overtake and 
countermand his letter mailed, than he can his words of acceptance after 
they have issued from his lips"). See '^Contracts," Deo. Dig. {Key-No.) f 26; 
Cent, Dig. §§ 119, 120. 

•4Knowlton*s Anson, Cont 22, note; ELIASON ▼. HENSHAW, 4 Wheat 
225, 4 L. Ed. 556, Throckmorton Cas. Contracts, 18; Potts v. Whitehead, 23 
N. J. Eq. 512; Thomas v. Greenwood, 69 Mich. 215, 37 N. W. 195; Mactier's 
Adm*rs v. Frith, 6 Wend. (N. Y.) 103, 21 Am. Dec 262; Eggleston v. Wagner, 
46 Mich. 610, 10 N. W. 37; Jordan v. Norton, 4 Mees. & W. 155; Corcoran 
V. White, 117 111. 118, 7 N. E. 523, 67 Am. Rep. 858; Siebold ▼. Da via, 67 



§ 21) OHABAGTEB, MODE, PLACE, AND TIMS OF ACCEPTANCE 35 

and expression of one and the same common intention — the inten- 
tion expressed by one of the parties is either doubtful in itself, or 
is different from that of the other. The intention of the parties 
must be distinct and common to both.** 

If a person offers to do a definite thing, and the person to whom 
the offer is made accepts conditionally, or introduces a new term 
into the acceptance, his answer is not an acceptance. It is either a 
mere expression of willingness to treat, or it is in effect a counter 
offer.** A proposal to accept, or an acceptance varying the terms 
from those offered, is a rejection of the offer, and the offer is then 
no longer open to acceptance.** 

Agreement to Make Contract 

If a person proposes to sell another property, and the latter ac- 
cepts "subject to the terms of a contract being arranged" between 
their solicitors, there is no agreement, for the acceptance is not 
final, but subject to a discussion to take place between the agents 
of the parties.** If anything is left for future arrangement, the 

Iowa, 660, 25 N. W. 778 ; Stagg v. Compton, 81 Ind. 171 ; Corser r. Hale, 149 
Pa. 274, 24 Atl. 285 ; Wilkin Mfg. Co. v. Lumber Co.. 94 Mich. 158, 153 N. W. 
1045 ; Wrlsten r. Bowles, 82 Cal. 84, 22 Pac. 1136 : Scott v. Davis, 141 Mo. 
213» 42 S. W. 714 ; Coad v. Rogers, 115 Iowa, 478, 88 N. W. 947 ; Seymour 
T. Armstrong, 62 Kan. 720, 64 Pac. 612 ; Shady Hill Nursery Co. v. Waterer, 
179 Mass. 318. 60 N. B. 789 ; MarschaU v. Elsen Vineyard Co., 28 N. Y. Supp. 
62, 7 Misc. Rep. 674 ; Strong & Trowbridge Co. v. H. Baars & Co., 60 Fla. 
253, 54 South. 92. See, also, the cases cited In following notes. 

As to acceptance by a person other than the one to whom the offer was 
made, see post, p. 24n • State ▼. Board of State Prison Comers, 37 Mont. 378. 
96 Pac. 736; Glbney & Co. v. Arlington Brewery Co., 112 Va. 117, 70 S. E. 
485. Bee *'Contraets,*' Deo. Dig, {Keu-^o,) f 24; Cent. Dig. §§ 100-lOS. 

•» Ante, p. Jt 

••Hough V. Bnjwn, 19 N. Y. Ill; Brlggs v. Slzer, 30 N. Y. 647; Borland 
T. Guffy, 1 Grant, Cas. (Pa.) 394; Harlow v. Curtis, 121 Mass. 320; Maclay 
F. Harvey, 90 111. 525, 32 Am. Rep. 35 ; Hammond v. Winchester, 82 Ala. 470. 
2 South. 892; Crabtree v. Opera-House Co. (C. C.) 39 Fed. 746; Hubbell v. 
Palmer, 76 Mich. 441, 43 N. W. 442; Bristol Aerated Bread Co. y. Maggs, 44 
Ch. Dlv. 616; Robertson v. Tapley, 48 Mo. App. 239; Crossley t. Maycock, 
18 Eq. 180; Mygatt t. Tarbell, 85 Wis. 457, 55 N. W. 1031; Jones r. Daniel, 
[1894] 2 Ch. 332 ; Davenport v. Newton, 71 Vt 11, 42 Aa 1087 ; Russell v. 
Manufacturing Co., 106 Wis. 829, 82 N. W. 134; Harris ▼. Scott, 67 N. H. 
437, 32 AU. 770 ; Putnam v. Grace, 161 Mass. 237. 37 N. B. 166. 

If so accepted by the original proposer. It becomes a binding promise. Es- 
may v. Gorton, 18 111. 483. See "Contracts,*' Dec. Dig. {Key-No.) | ti; Cent. 
Dig. U 100-lOS. 

•7 Minneapolis & St L. Ry. Co. v. Mill Co., 119 U. S. 149. 7 Sup. Ct 168, 
30 L. Ed. 376; Hyde ▼. Wrench. 3 Beav. 334; Virginia Hot Springs Co. v. 
Harrison, 93 Va. 569, 25 S. E. 888 ; James v. Darby, 100 Fed. 224, 40 C. C. 
A. 341. Bee '^Contracts/' Dec Dig. {Key-No.) f £4; Cent. Dig. §§ lOO^-lOS. 

•• Honeyman ▼. Marryat, 6 H. L. Cas. 112. It seems that an acceptance 



36 OFFER AND iiCCBPTANCB (Ch. 2 

parties have not agreed.** It is not to be understood from this that 
there must be nothing at all to be done after the acceptance. If 
the parties are fully agreed, there is a binding contract, notwith- 
standing the fact that a formal contract is to be prepared and 
signed ; ^* but the parties must intend the agreement to be binding. 
If, .though fully agreed on the terms of their contract, they do not 
intend to be bound until a formal contract is prepared and signed, 
there is no contract, and the circumstance that the parties do in- 
tend a formal contract to be drawn up is strong evidence to show 
that they did not intend the previous negotiations to amount to an 
agreement.''* 

Acceptance Varying from Offer 

An offer to sell a specified quantity of goods cannot be made 
binding on the proposer by ordering a less quantity, for there is 
no offer to sell any quantity greater or less than that specified.''* 
And the same is true where the offer is to sell a certain quantity 
each of several articles, and the person to whom the offer is made 
orders the specified quantity of one or more of them, but declines 

« 

of an offer to sell land, "subject to the title being approved by" the accept- 
or's attorneys, is not conditional. Hussey ▼. Home-Payne, 4 App. Cas. 311, 8 
Ch. Div. 670. See "Vendor and Purehaser.*' Dee. Dig, {Key-No.) f| 16, 17; 
Cent, Dig. fi 17-21. 

« 9 Martin r. Fuel Co. (C. C.) 22 Fed. 586; Appleby ▼. Johnson, L. R. 9 
C. P. 158 ; Bank of Columbia v. Hagner, 1 Pet 455, 7 L. Ed. 219 ; Utley v. 
Donaldson, 94 U. S. 29, 24 L. Ed. 54 ; First Nat Bank ▼. HaU, 101 U. S. 43, 
25 L. Ed. 822; Brown ▼. N. Y. Central R. Co., 44 N. Y. 79; Canton Co. v. 
Railroad Co., 21 Md. 383, 396 ; First Nat Bank v. Clark, 61 Md. 400, 48 Am. 
Rep. 114 ; Bruce v. Bishop, 43 Yt 161 ; Sibley ▼. Felton, 156 Mass. 273, 31 N. 
E. 10; Sparks r. Pittsburgh Co., 159 Pa. 295, 28 Atl. 152;. Stanley v. Dowdes- 
well, L. R. 10 C. P. -102 ; Shepard v. Carpenter, 54 Minn. J53, 55 N. W. 906 ; 
St Louis & S. F. R. Co. ▼. Gorman, 79 Kan. 643, 100 Pac. 647, 28 L. R. A. 
(N. S.) 637. And see post, p. 52. See "Vendor and Purchaser,** Dec, Dig. 
{Key-No.) §S 16, 17; Cent. Dig. f§ i7-«i. 

ToRidgway V. Wharton, 6 H. L. Cas. 238; Bolton r. Lambert 41 Ch. Dlv. 
295; Bonnewell r. Jenkins, 8 Ch. Div. 70, 73; Cheney v. Transportation 
Line, 59 Md. 557; Allen v. Chouteau, 102 Mo. 309, 14 S. W. 869; Lawrence 
V. Railroad Co., 84 Wis. 427, 54 N. W. 797 ; Sanders ▼. Fruit Co., 144 N. Y. 
209, 39 N. E. 75, 29 L. R. A. 431, 43 Am. St Rep. 757. See "Vendor and Pur- 
chaser;' Dec, Dig. {Key-No.) |$ 16, 17; Cent. Dig. ff 17-2i. 

71 Ridgway V. Wharton, 6 H. L. Cas. 238 ; Winn v. Bull, 7 Ch. Div. 20 ; 
Wills V. Carpenter, 75 Md. 80, 25 Atl. 415 ; Commercial Tel. Co. v. Smith, 47 
Hun (N. Y.) 494. See "Vendor and Purchaser,** Dec. Dig. {Key-No.) §§ 16, 
17; Cent. Dig. §§ 17-21. 

T 2 Minneapolis & St L. Ry. Co. v. RollIng-MiU Co., 119 U. S. 149, 7 Sup. 
Ct 168^ 30 L. Ed. 376; Michigan Bolt & Nut Co. v. Steel, 111 Mich. 153, 09 
N. W. 241. See ''Sales,** Deo. Dig. iM^ey-No.) tf ««-«5; Cent. Dig. f{ 5MS; 
"ContracU,** Cent. Dig. t§ 71, 75. 



S 21) CHABACTBB, MODE, PLACE, AND TIME OF ACCEFTANOB 37 

the others.''* Nor will an order of a certain quantity of goods, ac- 
cepted by sending a less quantity, impose any liability for the 
goods sent.^* So, also, if a person proposes to sell land to another 
for a certain sum, and the latter replies that he will give a less 
sum, there is nothing binding between the parties.^* Again, if a 
person offers to sell land, saying nothing as to the place of pay- 
ment, and the acceptance specifies that payment shall be made at 
the acceptor's place of residence, there is no contract, since, under 
the offer, the proposer would be entitled to payment at his place 
of residence/* 

Manner, Place, and Time of Acceptance 

It is also essential that the acceptance shall be made in the man- 
ner, at the place, and within the time expressly or impliedly desig- 
nated in the offer. The proposer has the right to dictate terms in 
respect to the time, place, and manner of acceptance ; and when he 
does so, like all other terms, they must be complied with. 'In 'a 
leading case on this point the defendant offered to buy flour 'from 
the plaintiffs, stating in his offer that the answer should be sent by 
return of the wagon which brought the offer. The plaintiffs, in- 
stead of sending their acceptance by the wagon, mailed it to the 
defendant at a place other than the destination of the wagon, where 
it was duly received by him. It was held, however, that he was 
not bound by the acceptance, as it was not sent to the place pre- 
scribed.^^ If an offer asks that the answer be sent by the messen- 
ger who brings the offer, or by mail, or by telegraph, it must be 

T* ThomaB ▼. Greenwood, 69 Mich. 215, 37 N. W. 195. See **8ale$,*' Dec, 
Dig. {Keu-Vo.) H 22, 2S; Om^. Dig. U S9-i8; *' Contracts,'' Ceni. Dig. i| 
71, 75. 

7 4 Brace y. Pearson, 8 Johns. (N. Y.) 534. As to Implied contract from re- 
taining and using or consuming the goods so sent, see ante, p. 19, and note 
7. See "Sales,'' Dec. Dig. {Key-No.) §§ 22, 2S; Cent. Dig. U S9-48; *'Conr 
tractt," Cent. Dig. S| 71, 76. 

TftHyde y. Wrench, 8 Beay. 836. And see post, p.* 20, and cases cited. 
Bee **Vendar and Purchaser," Dec. Dig. {Key-No,) |§ 16, 17; Cent. Dig. ifi 
17-«i. 

T« Baker v. Holt, 56 Wla 100, 14 N. W. 8; Sawyer v. Brossart. 67 Iowa, 
e78> 25 N. W. 876, 6 Am. Rep. 371 ; Gilbert y. Baxter, 71 Iowa, 327, 32 N. 
W. 364; Langelller y. Schaefer, 36 Minn. 361, 81 N. W. 690; Robinson v. 
Weller, 81 Ga. 704, 8 S. B. 447; Maynard v. Tabor, 68 Me. 511. See ''Vendor 
and Purchaser," Deo. Dig. {Key-No.) |§ 16, 17; Cent. Dig. %% 17-21. 

7TELIAS0N y. HENSHAW, 4 Wheat 225, 4 L. Ed. 556, Throckmorton 
Gas. Contracts, IS. Where a person Tesiding in one state makes a written 
offer to a person residing in another, and at a distance, to sell lands, with- 
out arranging tat a personal meeting, an acceptance by maU la authorized. 
Wiloox y. CUne, 70 Mich. 517, 88 N. W. 555. See ^'Contracts,'' Dec. Dig. 
(Key-NoJi I 22; Cent. Dig. |§ 82-92, lOk-108. 



38 OFFBB AND ACOBPTANCB (Ch. 2 

SO sent, to be effective.** An answer by mail is insufficient if the 
telegraph is the mode prescribed.'* An offer by mail, which says 
nothing as to the mode of sending the answer, impliedly requires 
an answer by mail, or possibly authorizes one by telegraph,** 
though an acceptance sent by any other mode, and reaching the 
proposer within a reasonable time, might be held sufficient.** An 
offer by telegraph impliedly requires an answer by telegraph, and 
an answer by mail will not be sufficient. 

If the oflFer specifies a time for acceptance, it is a term of the 
offer, and an acceptance after the specified time will "have no ef- 
fect.** An offer by correspondence, for instance, calling for an 
answer "in course of post," or "by return mail," must be accepted 
by return mail.** It may safely be said that any substantial delay 
will be fatal, even where an answer by "return mail" is not re- 
quested. An acceptance sent three or four days after the receipt 
of the offer has been held too late, and there seems no reason to 
doubt that a deUy of one day would be equally fatal.** If no time 

Ts Carr v. Dnyal, 14 Pet 83, 10 L. Ed. 361. Putting a letter of acceptance 
in the private letter box of the proposer has been held snfflcient. Howard ▼. 
Daly, 61 N. Y. 362, 19 Am. Rep. 285. As to what constitutes maiUng a letter, 
see ante, p. 33, note 60. See ** Contract a,*' Dec. Dig. {Key-No.) $ 22; Ccfit. 
Dig. SI 82-92, 104-108. 

T» Home V. Niver, iISS Mass. 4, 46 N. B. 393. See ''Contracts,'* Dec. Dig. 
{Key-No.) f 22; Cent. Dig. fS 82-92, 104-108. 

«o Mactler*8 Adm'rs v. Frith, 6 Wend. (N. Y.) 103, 21 Am. Dec. 262; Vassar 
V. Camp, 11 N. T. 441 ; Tayloe r. Insurance Co., 9 How. 390, 13 L. Ed. 187 ; 
Wilcox V. Cline, 70 Mich. 517, 38 N. W. 555 ; Trevor v. Wood. 36 N. Y. ^07, 93 
Am. Dec. 511. See ^'Contracts;* Dec. Dig. {Key-No.) I 22; Cent. Dig. fS 82-^2, 
104-108. 

•iTrounstine v. Sellers, 85 Kan. 447, 11 Pac 441. See **Contraci9,^ Deo, 
Dig. {Key-No.) I 22; Cent. Dig. f| 82-92, 104-108. 

8« Longworth v. Mitchell, 26 Ohio St 334 ; Potts v. Whitehead, 20 N.. J. 
Eq. 55 ; Brltton v. Phillips, 24 How. Praa (N. Y.) Ill ; Richardson v. Hard- 
wi<5k, 106 U. S. 252, 1 Sup. Ct 213, 27 L. Ed. 145 ; Union Nat Bank v. MiUer, 
106 N. C. 347, 11 S. ^. 321, 19 Am. St Rep. 538 ; Weaver v. Burr, 31 W. Va. 
736, 8 S. E. 743, 3 U R. A. 94; Cummings v. Realty Co„ 86 Wis. 382, 57 N. 
W. 43. And see Park v. Whitney, 148 Mass. 278, 19 N. E. 161. 'See **aon^ 
tracts,*' Dec. Dig. {Key-No.) § 20; Cent. Dig. §i Sy-lO. 

•»Dunlop V. Higgins, 1 H. L. Cas. 387; Carr v. Duval, 14 Pet 83, 10 L. 
Ed. 861 ; Maclay v. Harvey, 90 111. 525, 32 Am. Rep. 35 ; Averill v. Hedge, 
12 Conn. 424 ; Tinn v. Hoffman, 29 Law T. (N. S.) 271. Cf. Palmer v. Insur- 
ance Co., 84 N. Y. 63. If the deUvery of a lettet containing an offer is de- 
layed through the sender's fault, or, it may no doubt be, without the fault 
of either party, an acceptance as soon as the letter is received is in time. 
It is by return maiL See Leake, Cont 18; Adams v. Lindsell, 1 Barn. & 
Aid. 681. See ^'ContraoU;' Deo. Dig. {Key-No.) I 20; Cent. Dig. §| 67-70. 

«« Taylor v. Rennie, 35 Barb. (N. Y.) 272; MINNESOTA LINSEED OIL CO. 
V. LEAD CO., 4 DUl. 435, Fed. Cas. No. 9,635, Throckmorton Cas. Contracts, 
24 ; Maclay v. Harvey, 90 IlL 525, 32 Am. Rep. 35 ; Ortman ▼. Weaver (C. C.) 



§§ 22-28) BBVOCATION OF OFFEB 39 

for acceptance is specified, then a reasonable time is implied.** 
What is a reasonable time must necessarily depend on the nature 
of the offer and the circumstances of each particular case. 



REVOCATION OF OFFER 

22. Until the moment of acceptance, an offer may be revoked, 

and a subsequent acceptance will be inoperative, except 
that— 
EXCEPTION— Where the party making the offer has contract- 
ed under seal or for a consideration to hold it open for a 
certain time, he may not revoke it within such time. 

23. Notice of revocation must be communicated, to prevent an ac- 

ceptance from being effective. 

Since an offer, unaccepted, creates no rights, it follows that it 
may be revoked at any time before acceptance.* • An order, for in- 
stance, given to the agent of the party to whom it is made, who har 
no authority to accept it, is revocable at any time before his prin- 
cipal accepts it; and it is immaterial that the order recites that it is 
taken with the understanding that it is p03itive, and not subject to 

11 Fed. 858 ; Donlop ▼. Hi^ns, 1 H. L. Cas. 887. See **CatUracis,'* Deo. Dig, 
{Kev-yo.) f 20; Cent. Dig. f$ 67-70. 

8s Ramsgate Hotel Co. v. Monteflore, L. R. 1 Exch. 109; BilNNESOTA LIN- 
SEED OIL CO. y. LEAD CO., 4 DHL 431, Fed. Cas. No. 9,635, Throckmorton 
Cas. Contracts, t 24; Ferrier y. Storer, C3 Iowa, 484, 19 N. W. 288, 50 Am. 
Rep. 752; AyeriU y. Hedge, 12 Conn. 424; Trounstlne y. Sellers, 85 Kan. 447, 

11 Pac. 441; McCracken y. Hamed, 66 N. J. Law, 87, 48 Atl. 518; Sanford 
y. Howard, 29 Ala. 684, 68 Am. Dec. 101; Lehigh Valley Coal Co. y. Cartis, 
22 UL App. 894; Chicago & G. E. R. Co. y. Dane, 43 N. Y. 240; Kempner y. 
Cohn, 47 Ark. 519, 1 S. W. 869, 58 Am. Rep. 775; Stone y. Harmon, 81 Minn. 
512, 19 N. W. 88; Omaha Loan & Trust Co. y. Goodman, 62 Neb. 197, 86 N. 
W. 1082. This has been held to apply to offers of a reward to the public 
generally by way of adyertlsement Lorlng y. City of Boston, 7 Mete. (Mass.) 
409. But t^ post, p. 49, note 22. Bee "ContractM,'* Dec. Dig, {Key-No.) i 20; 
Cent. Dig. §| !r7-7(?. 

«• IDE y. LEISER, 10 Mont 5, 24 Pac 695, 24 Am. St Rep. 17, Throck- 
morton Cas. Contracts, 20; Payne y. Caye, 8 Term R. 148; Offord y. Dayles, 

12 C. B. (N. S.) 748; Countess of Dunmore y. Alexander, 9 Shaw, D. & B. 
190 ; Quick v. Wheeler, 78 N. Y. 300 ; Houghwout y. Bolsaubln, 18 N. J. Eq. 
815; Schenectady Stoye Co. y. Holbrook, 101 N. Y. 45, 4 N. E. 4; Wheat y. 
Cross, 81 Md. 99, 1 Am. Rep. 28; Boston & M. R. R. Co. y. Bartlett, 8 Cush. 
(Mass.) 224; Welden y. Woodruff, 88 Mich. 130; Larmon y. Jordan, 56 111. 
204; Crocker y. RaUroad Co., 24 Conn. 249; Martin y. Hudson, 81 Cal. 42, 
22 Pac 292; MlUer y. DouylUe, 45 La. Ann. 214, 12 South. 132; Eskrldge 
y. Gloyer, 5 Stew. & P. (Ala.) 264, 26 Am. Dec 344; Tucker y. Lawrence, 56 

>yt 467; Benton y. Association, 170 Mass. 584, 49 N. B. 928, 64 Am. St Rep. 



40 orrsR and accbptancb (Ch. 2 

changfe or countermand.*^ Where an offer is made to several per- 
sons, it must be accepted by all before it becomes binding on the 
proposer, for an acceptance by less than all is not a compliance 
with the terms of the offer ; and it follows that such an offer may 
be revoked at any time before it is accepted by all.'* 

Offer Under Seal 

It has been said that an offer under seal may not be revoked 
at common law.** This view, however, is due to a misconception 
of certain English cases,** which hold that a deed or contract un- 
der seal is binding upon a party from the time it is executed by 
him with intent to give it effect, although it has not been delivered 
or communicated tO| the other party ; and being a valid obligation 
from the time of its execution, it may not be revoked. Such a deed, 
however, is not a mere offer to become bound, but itself imposes 
an obligation. The correct doctrine is that an offer under seal, 
as in the case of offers generally, may be revoked at any time be- 
fore acceptance.** Where, however, an offer is accompanied by an 
agreement under seal to leave it open for a certain length of time, 
it constitutes an option or refusal, the rules in regard to which are 
stated below. 

Agreement to Hold Offer Open— "Refusals" and "Options^' 

An offer, though coupled with a promise to hold it open for ac- 
ceptance for a specified time, may nevertheless be revoked or with- 
drawn before the time has expired, provided it is not under seal and 
there is no consideration for the promise to hold the offer open.** 

320. The addition of a new term to an offer Is a revocation of that offer. 
Travis v. Insurance Co., 104 Fed. 486, 43 C. O. A. 653. Bee ^'Contracts;* Dee. 
Dig, (KeV'No.) § 19; Cent. Dig. SS 57^0. 

ST National Refining Co. v. Miller, 1 S. D. 548, 47 N. W. 962. And see 
Challenge Wind A Feed Mill Co. v. Kerr, 93 Mich. 328, 63 N. W. 55o ; Harvey 
V. Duffey, 99 Cal. 401, 33 Pac. 897. See ''Contracti," Dec. Dig. {Key-No.) 
S 19; Cent. Dig. H 57-60. 

•• Burton v. Shotwell, 13 Bush (Ky.) 271. Bee **Oontract8,'* Dec. Dig. {Key- 
yo.) I 19; Cent. Dig. S| 57-60. 

s» Anson, Cont (8th Ed.) 32. 

•0 Xenos v. Wickham, L. R. 2 H. L. 296; Doe d. Garnons, 6 B. & C. 671, 29 
Rev. Rep. 355; Butler ft Baker's Case, 3 Coke, 26b. See, also, Roberts v. 
Security Co., [1897] 1 Q. B. 111. Bee ^'Contracts;' Dec. Dig. {Key-Np.) i 19; 
Cent. Dig. i§ 57-60. 

•1 See preface 29 Rev. Rep. v-lx (Sir Frederick Pollock) ; 16 Yale L. J. 155 ; 
Ashley, Cont 254 et seq. 

•« IDE V. LEISER, 10 Mont 5, 24 Pac. 695, 24 Am. St Rep. 17, Throck- 
morton Caa. Contracts, 20 ; Cooke v. Oxley, 3 Term R. 653 (as to this case, see 
post, p. 43, note 1); Routledge ▼. Grant, 4 Bing. 653;. Head v. Dlggon, 3 
Man. ft R. 97; Stevenson v. McLean, 5 Q. B. Div. 351 ; Dickinson v. Dodda 
2 Ch. Dly. 463; Chicago ft O. EL R. Co. ▼. Dane, 43 N. Y. 240; Stensgaard 



§§ 22-23) BBYOCATION OF OFFEB il 



»f 



Cases of this kind arise where a person gives another the ''refusal 
of land or goods for a certain time, or an option to buy. If the 
promise to keep an offer open for a specified time is under seal, or 
is supported by a valuable consideration — as where money is paid 
or promised for the option or refusal — ^the promise constitutes a 
contract in itself, and, of course, is binding.*' A failure to keep 
such an offer open constitutes a breach of contract for which an ac- 
tion for damages will He. As to whether the offeree may become 
entitled to specific performance of the contract of sale by accept- 
ance after the offer has been withdrawn, in violation of the con- 
tract to keep it open, there is a conflict of authority. ^ Some courts 
hold that, although the act of revocation itself constitutes a breach 
of contract, there can be no acceptance of an offer that has in fact 
been revoked, and therefore there is no subsisting contract of sale 
which may be enforced.** Other cases, however, representing the 
weight of authority, regard the option, where it is under seal or 
supported by a consideration, as a contract to sell or convey upon 
condition, and therefore as entitling the offeree to specific perform- 
ance upon compliance with the condition, as by notice of accept- 
ance of the offer to sell within the time stipulated in the option.** 

T. Smith, 43 Minn. 11, 44 N. W. 069, 19 Am. St Rep. 206; Coleman y. Apple- 
gartb, 68 Md. 21, 11 Att. 284, 6 Am. St Bep. 417 ; Eskridge y. Oloyer, 6 Stew. 
& P. (Ala.) 264, 26 Am. Dec 844; Larmon y. Jordan, 56 lU. 206; Welden v. 
Woodruff, 38 Mich. 130; Klee y. Grant, 4 Misc. Rep. 88, 23 N. Y. Supp. 855; 
Connor y. Renneker, 25 S. C. 514 ; Sault Ste. M., L. & I. Co. y. Simons (O. C.) 
41 Fed. 835; Weayer y. Burr, 31 W. Va. 736, 8 S. E. 748, 3 L. R. A. 9i; 
Brown y. Sayings Union, 134 CaL 448, 66 Pac. 592; Corbett y. Cronkhite, 
239 111. 9, 87 N. E. 874 ; post, p. 148. Bee "Cantracti,'* Dec. Dig. (Key-yo.) 
i 19; Cent, Dig. H SISO. 

•» WATKINS V. ROBERTSON, 105 Va. 269, 54 S. E. 33, 5 L. R. A, (N. S.) 
1194, 115 Am. St Rep. 880, Throckmorton 'Cas. Contracts. 43 [qnot Clark on 
Contracts, (2d Ed.) 33]; Grabenhorst y. Nicodemus, 42 Md. 236; Stltt ▼. 
Uuidekoper, 17 Wall. 3S4, 21 L. Ed. 644; Bradford y. Foster, 87 Tenn. 4, 9 S. 
W. 195; Chadsey y. Condley, 62 Kan. 853, 62 Pac. 663. See *' Sales:* Dec. 
Dig. {Key-No.) 81 «^, 25; Cent. Dig. U ^P-52; '^Specific Performance," Dec. 
Dig. {Key-No.) | 57; Cent. Dig. | 178; ''Vendor and Purchaser," Dec. Dig. 
(Key-No.) | 18; Cent. Dig. I 2S. 

•4 See Litz y. Goosling. 93 Ky. 185, 19 S. W. 527, 2i L, R A. 127; GraybiU 
y. Brugh, 89 Va. 895, 17 S. E. 558» 21 L. R. A. 133, 37 Am. St Rep. 894. See 
'^Specific Performance," Deo. Dig. {Key-No.) § 57; Cent. Dig. | 178. 

»» WATKINS V. ROBERTSON, 105 Va. 269, 54 S. E. 33, 5 L. R. A. (N. S.) 
1194, 115 Am. St Rep. 880, Throckmorton Cas. Contracts, 43 [oyerniling Gray- 
bill y. Bmgh, sapraj ; WiUard y. Tayloe, 8 WaU. (U. S.) 557, 19 L. Ed. 501 ; 
O'Brien y. Bolond, 166 Mass. 481, 44 N. E. 602; Mansfield y. Hodgdon, 147 
Mass. 304, 17 N. E. 544; McMillan y. Ames, 33 Minn. 257, 22 N. W. 612; 
Hayes y. O'Brien. 149 111. 403, 37 N. E. 73, 23 L. R. A. 555; 9 Cyc Law & 
Pioc. 287; Zimmerman y. Brown (N. J. Ch.) 86 AtL 675; Chadsej y. Condley, 



42 OFFER AND AGGSPTANCB (Ch. 2 

Comtnunication of Revocation — Necessity of 

Revocation must be communicated, or at least brought to the 
knowledge of the offeree, to have any effect As we have seen, an 
acceptance may take effect at the moment it is dispatched A rev- 
ocation, on the contrary, is not effective until the moment it is re- 
ceived. A person, therefore, who has accepted an offer not known 
Dy him to have been revoked, may safely act on the footing that the 
offer and acceptance constitute a contract binding on both parties. 
A person who has received an offer by post or telegraph, and post- 
ed or telegraphed his acceptance, has thereby created a binding 
contract, though notice of revocation of the offer has been mailed 
or wired to him before his acceptance.** The law, it is said, re- 
gards the proposer as making his offer during every instant of time 
that his letter is traveling, and during the period that may be con- 
sidered as a reasonable time for acceptance. The party to whom 
the offer is made is therefore entitled to consider that it is still 
being made, unless he has notice to the contrary, and that his ac- 
ceptance concludes a binding contract. The revocation cannot be 
held to be communicated merely because it has been put in the 
course of transmission. If, after an offer has been posted, or sent 
by any other means, the proposer sends a withdrawal by such 
means that it reaches the person to whom the offer was sent at 
the same time as the offer, this is a good revocation, and an accept- 
ance of the offer will be ineffectual.*^ 

Same — Sufficiency of v 

There has been some difficulty in cases in which the offeror has 
done some act indicating an intention to retract, as by a sale of 

02 Kan. 853^ 62 Paa 663; Bradford v. Foster, 87 Tenn. 4, 9 S. W. 195. See 
'*8peciflo Performance,'' Dee. Dig, {Key-Vo.) % 51 ; Cent. Dig. % 178. 

•• Byrne t. Tlenhoven, 6 G. P. DIt. 349 ; Henthorn v. Frazer [1892] 66 L^ 
T. (N. S.) 439, 2 Ch. 27; Harris' Case, Ll R. 7 Ch. App. 587; Tayloe v. Insur- 
ance Co., 9 How. 390, 13 L. Ed. 187; Patrick ▼. Bowman, 149 U. S. 411, 13 
Sup. Ct 811, 806, 37 h. Ed. 790; Hamilton v. Insurance Co., 5 Pa. 342; 
Lungstrass v. Insurance Co., 48 Mo. 201, 8 Am. Rep. 100; Kempner y. Cohn, 
47 Ark. 519, 1 S. W. 869, 58 Am. Rep. 775 ; Wheat ▼. Cross, 31 Md. 99, 1 Am. 
Rep. 28; Hallock t. Insurance Co., 28 N. J. Law, 268; Faulkner v. Hebard, 
26 Vt 452 ; McCotter v. City of New York, 37 N. Y. 325 ; Weiden t. Woodruff, 
38 Mich. 130; Crocker v. Railroad Co., 24 Conn. 249; Cobb v. Foree, 38 111. 
App. 255; Brauer y. Shaw, 168 Mass. 108, 46 N. E. 617, 60 Am. SL Rep. 387; 
Wester y. Casein Co. of America, 140 App. DIt. 442, 125 N. Y. Supp. 335. 
See '* Contracts,** Dec. Dig. {Key-No.) § 19; Cent. Dig. 88 67S0. 

•T Dunmore y. Alexander, 9 Shaw & D. 190. Suppose, howeyer, the letter 
containing the offer should be read, and an acceptance dispatched in good 
faith, before the letter containing the withdrawal is opened. It would seem, 
on principle, that in such a case the acceptance must be effectual.. See **Con- 
tracter Deo. Dig. {Key-No.) SI 19, H; Cent. Dig. 81 57-60, 10^-108. 



§§ 22-23) BEVOCATION OF OFFBB ^ 

property offered, putting it out of his power to perform, but with- 
out communicating his revocation. It is probably settldd that any 
overt act clearly showing an intention to revoke is enough, provid- 
ed the person to whom the offer was made has notice of such act 
before he accepts. The revocation need not be communicated, but 
it is sufficient if he has knowledge of acts clearly indicating an in- 
tention to revoke.** It is not clearly settled what would be suffi' 
cient notice. It might probably be said that the notice must be 
such as reasonably amounts to knowledge of acts inconsistent with 
the continuance of the offer. In case of an offer to sell specific 
property, actual knoWledge of its sale to another would clearly 
show an intent to revoke, but it is doubtful whether information 
from a stranger that such a sale has been made, or that the propos- 
er has changed his mind, would be sufficient, as it would scarcely 
be reasonable to require a man to believe and act on such state- 
ments. In the absence of sufficient notice or knowledge of a revo- 
cation, the offer, according to the better doctrine and the weight 
of authority, continues open and will be turned into a binding 
promise by its acceptance.** Some courts, however, seem to have 
held, contrary to reason and principle, that notice of withdrawal 
is not necessary.* Where the parties are dealing with each other at 

MDlddnson ▼. Dodds, 2 Ch. Div.,463; Coleman v. Applegarth, 68 Md. 21, 
11 Ati. 284, 6 Am. St Eep. 417. - See **Contra€ts,'* Deo. Dig. (Key-No.) | 19; 
Cent. Dig. H 57-^0. 

•• Bofiton & M. R. R. Ca y. Bartlett, 8 Gush. (Mass.) 224^ 225; Great North- 
em R. Co. V. Witham, U R 9 G. P. 16; Eskridge ▼. Glover, 5 Stew. & P. 
(Ala.) 264, 26 Am. Dec. 844; Houghwout v. Boisauhin, 18 N. J. Eq. 318; 
Henthom ▼. Prazer [1892] 66 Li T. (N. S.) 439, 2 Ch. 27; Cheney v. Cook, 
7 Wis. 413; School Directors v. Trefethren, 10 111* App. 127; Paddock v. 
Dayenport, 107 N. G. 710, 12 S. E. 464 ; Wall y. RaUroad Co., 86 Wis. 48, 66 
N. W. 867. And see Dambmann y. Lorentz, 70 Md. 380, 17 Atl. 380, 14 Am. 
St R^. 364. See, also, post, p. 14a See **Contracis," Dec. Dig. (Key-No.) |§ 
19, 22; Cent. Dig. H 57-€0, 104^108. 

1 Tucker y. Woods, 12 Johns. (N. Y.) 190, 7 Am. Dec. 305 ; Bean y. Bur- 
bank, 16 Me. 458, 33 Am. Dec 681; Gillespie y. Edmonston, 11 Humph. 
(Tenn.) 553. And see Cooke y. Gzley, 3 Term R. 653. This case has been 
yery much criticised ^nd disapproved in so far as it seems to hold that, where 
an offer gives a specified time within which it may be accepted, an acceptance 
within that time, without notice- that the offer has been revoked, does not 
bind; that is to say, that notice of the revocation is not necessary. If the 
case was intended to go this- far, it is not considered as authority in this 
country. Boston & M. R. R. Co. v. Bartlett, 8 Gush. (Mass.) 224. Nor, it 
seems, is it followed, even in England, to such an extent as we have suggest' 
ed. Indeed, a later English case says: "All that Cooke v. Oxley affirms is 
that a party who gives time to another to accept or reject a proposal is not 
bonnd to wait till the time expires. • • • The offer may be revoked before 
acceptance. If the offer is not retracted, it is in force as a continuing offei 
till the time of accepting or rejecting it has arrived." Stevenson y. McLean, 



44 OFFER AND ACCEPTANCB (Ch. 2 

a distance by correspondence, it is the settled law, in these as in 
other cases, that the offer continues open until notice of its with- 
drawal is not only sent, but received by the party to whom it was 
made, and is turned into a binding promise if accepted before re- 
ceipt of the notice.* Knowledge in these cases also may be equiv- 
alent to notice sent and received. 

The case of an offer made to the public generally by publication 
stands on a different footing from an offer made directly to a defi- 
nite person. Such an offer may be revoked in the manner in which 
it was made.* 

LAPSE OF OFFER 

24. An offer will lapse, and so be determined without express rev- 
ocation, so that a subsequent acceptance will have no 
effect— 

(a) On the efHux of a time specified for acceptance, or of a rea- 

sonable time where no time is specified; 

(b) On its rejection ; 

(c) On failure of the acceptance to comply with the terms of the 

offer, which is equivalent to rejection ; 

(d) On the death or insanity of either party before acceptance. 

EMux of Time 

An offer may lapse and be determined by the efHux of a specified 
time for acceptance. If a person should offer to sell goods "if the 
offer is accepted by" a certain day, an acceptance after that time 
would have no effect. After the specified time has p^issed without 
acceptance, the offer lapses, or is determined without any further 
action on the part of the proposer, and it is no longer open for ac- 

5 Q. B. Div. 351. If the case of Cooke t. Ozley merely decides that an offer, 
coupled with a promise to keep it open for a specified time, may be revoked, 
to the knowledge of the other party, before the time has expired, where 
there is no consideration for the promise to keep it open, it is in accord with 
the law in this country, and with the later decisions in England. Bee "Coip- 
tracts," Deo. Dig. {Key-Vo,) §§ 19, 22; Cent. Dig. §§ 57-60, 104-108. 

2 Hamilton v. Insurance Co., 6 Pa. S39; Larmon v. Jordan, 56 IlL 204; 
Averill V. Hedge, 12 Conn. 434; j^oore v. Pierson, 6 Iowa, 279, 71 Am. Dec. 
409; ante, pp. 31-34. See '* Contracts;* Dec. Dig. (Key-No.) §§ 19, 22; Cent. 
Dig. §§ 82-92, lOi-^lOB. 

8 Shuey v. United States, 92 U. S. 73, 23 L. Ed. 007. Ree "Contracts;* Dec. 
Dig. {Key-No.) § 79; Cent. Dig. fS 57-60; ''Rewards;' Dec Dig. {fey-No.) 
3-7; Cent. Dig. H 5-7. 



I 24) LAPSE OF OFFBli 46 

ceptance.^ If no time is specified, the offer is determined by the 
lapse of a reasonable time.' 

Rejection 

The rejection or refusal of an offer by the person to whom it is 
made causes the offer to lapse. In order that an acceptance may 
be effective after a refusal, the offer must have been renewed by 
the proposer.* 

So, also, a failure to comply with a condition of the offer as to 
the mode of acceptance, or an acceptance conditionally, or on terms 
varying from those offered, will cause the offer to lapse, for this is, 
in effect, a rejection of the offer. "^ Thus, where a person offered to 
sell land at a certain sum, and the person to whom the offer was 
^ made replied that he would give a less sum, and afterwards, when 
this was refused, and when the proposer wais no longer willing to 
adhere to his original proposal, sought to bind him by accepting 
at the sum first asked, it was held that the proposal to buy at a less 
sum than asked was a refusal of the offer, and a counter proposal, 
and that the original offer could not, after that, he turned into a 
promise by acceptance.* 

r 

• Ante, p. 38, and cases cited in notes 82-^84. 

B MINNESOTA LINSEBD OIL CO. ▼. COLLIER WHITE LEAD CO., 4 

Dill. 431, 17 Fed. Caa No. 9,635, Throckmorton Cas. Contracts, 24; Rams- 

icate Hotel Go. t. Monteflore, 1 Bzch. 109; Loring y. City of Boston* 7 Mete. 
(Mass.) 409 ; ante, p. 39, and cases cited in note 85. Continuing offer. Sherley 

T. Peehl, 84 Wis. 40, 54 N. W. 267. See "Contracts;' Dec. Dig. (Key-No.) | 20; 

Cent. Dig. H 67-70. 

• Tinn T. Hoffman, 29 Law T. <N. S.) 271; Hyde t. Wrench, 3 Bear. 334; 
DsTis T. Parish, Utt Sel. Cas. (Ky.) 153, 12 Am. Dec. 287; W. & H. M. 
Oonlding t. Hammond, 4 a C. A. 533, 54 Fed. 639; Sheffield Canal Co. y. 
Sheffield A R. Ry. Co., 3 Ry. Cas. 121, 132 ; Arthur y. Gordon (C. C.) 37 Fed. 
558; Richardson y. Lenhard, 48 Kan. 629, 29 Pac. 1076. See "Contracts" 
Deo. Dig. {Key-No.) | 20; Cent. Dig. §| 67-70. 

f Hyde y. Wrench, 3 Beay. 836; First Nat Bank y. Hall, 101 U. S. 50, 25 
U Ed. 822; Minneapolis & St L. Ry. Co. y. RoUing-MUl Co., 119 U. S. 149, 
7 Sup. Ct 168, 30 Ll Ed. 376; Carr y. Duyal, 14 Pet 77, 10 L. Ed. 361; Der- 
rick y. Monette, 78 Ala. 75; Jenness y. Iron Co., 53 Me. 20; Weayer y. Burr, 
81 W. Va. 736, 8 S. E. 743, 3 L. R. A. 94 ; Clay y. Ricketts, 66 Iowa, 362, 23 
N. W. 755; Comwells y. Krengel, 41 111. 394; Eggleston y, Wagner, 46 Mich. 
610, 10 N. W. 37; Iron Works y. Douglas, 49 Ark. 355, 6 S. W. 585; North- 
western Iron Co. y. Meade, 21 Wis. 474, 94 Am. Dec. 557; First Nat Bank 
y. Clark, 61 Md. 400, 48 Am. Rep. 114; Crabtree y. Opera-House Co. (C. C.) 
89 Fed. 746 ; W. & H. M. Goulding y. Hammond, 4 C. C. A. 533, 54 Fed. 639. 
Bee "Contracts;' Dec. Dig. (Key-No.) %.2i; Cent. Dig %\ 100-103. 

• Hyde y. Wrench, 8 Beay. 336. See "Contracts," Dec. Dig. (Key-No.) | 24; 
Cent. Dig. U 100-10^ 



A6 OFFSB AMD ACCEPTANCB (Ch. 2 

Death or Insanity of Party 

The death • or insanity *• of either party before acceptance of an 
offer causes the offer to lapse. An acceptance communicated to the 
personal representatives of the proposer after his death cannot bind 
them ; nor can the representatives of the person to whom an offer 
has beon made, and who has since died, bind the proposer by ac- 
cepting it on behalf of the estate. An offer, as we have said, is con- 
sidered as continuing up to the time of acceptance, but if one of the 
parties dies, then there is on one by whom or to whom, as the case 
may be, the offer can be considered as being made.** The fact that 
an acceptance is dispatched in ignorance of the proposer's death 
can make no difference. Since, however, an acceptance by mail 
takes effect at the moment of its dispatch, the death of the proposer 
before the receipt of the acceptance, but after it has been mailed, 
does not cause the offer to lapse, since, before his death, it has been 
turned into a binding promise by the acceptance.*" 

So, also, the dissolution of a partnership after an offer has been 
i^ade by the firm, and before its acceptance, with notice thereof to 
the person to whom the offer was made, revokes the offer ; *• and 
it would seem that dissolution of a firm to whom an offer is made, 
before acceptance, must tlecessarily cause the offer to lapse, as the 
party to whom the offer was made is no longer in existence. 

• Wallace y. Townsend, 4S Ohio St 537, 3 N. E. 601, 64 Am. Rep. 829; 
Mactler'8 Adm'rs ▼. Frith, 6 Wend. (N. Y.) 103, 21 Am. Dec 2G2;. Pratt v. 
Trustees of Baptist Soc., 03 111. 475, 34* Am. Rep. 187 ; In re Helfensteln^s 
Estate, 77 Pa. 328, 18 Am. Rep. 449; Frith t. Lawrence, 1 Paige (N. Y.) 434; 
Blades v. Free, 9 Barn. & C. 167; Campanarl ▼. Woodbum, 15 G. B. 400; 
Lee V. Griffin, 1 Best & S. 272 ; Aitkin v. Lang's Adm*r, 106 Ky. 652, 51 S. 
W. 154, 90 Am. St Rep. 263 ; Werner v. Humphreys, 2 Man. & G. 853 ; Marr 
V. Shaw (0. 0.) 51 Fed. 860. See *'CofUracts,** Dec. Dig, (Key-No.) 1% 19, 20; 
Cent, Dig. I 58; '* Corporations," Dec. Dig. {Key-No.) % 8S; Cent. Dig. SS 
S28-SS6; *iSul>scHptions;' Dec. Dig. (Key-No.) H 4, IS; Cent. Dig. §S 5, 20, 21. 

10 The Palo Alto, 2 Ware, 344, Fed. Gas. No. 10,700 ; Beach v. First M. B. 
Ghurch, 96 111. 177. It seems that knowledge of the insanity by the other 
party is essential. Drew y. Nunn, 4 Q. B. Dlv. 661; Imperial Loan Go. t. 
Stone, [1892] 1 Q. B. 599. As to validity of contract of insane person, see 
post, p. 223. Bee ^'Contracts," Dec. Dig. (Key-No.) | 19; Cent. Dig. § 58. 

11 Frith V. Lawrence, supra; Pratt ▼. Trustees, supra. 'See "Contracts,** 
Dec. Dig. (Key-No.) §§ 19, 20; Cent. Dig. §S 57-SO, 67-70. 

12 Mactier's Adm*rs v. Frith, 6 Wend. (N. Y.) 103, 21 Am- Dec. 2C2. See 
^'Contracts;' Dec. Dig. (Key-No.) || 19, 20; Cent. Dig. §§ 57-60. 67-70. 

"Goodspeed v. Plow Go., 45 Mich. 822. 7 N. W. 902. See ^'Contracts,** 
Dec. Dig. (Key-No.) % 19; Cent. Dig. H 67-4)0; ^^Partnership;* Dec Dig. 
iKey-No.) f 2iS; Cent. Dig. U 510^15. 



/ 



S 25) OFFEB8 TO THB PUBUO OENBRALLT 47 



OFFERS TO THE PUBLIC GENERALLY 

25. An offer need not be made to an ascertained person, but no con- 
tract can arise until it has been accepted by an ascertained 
person. 

In order that an offer may result in a contract it need not be 
made to a definitely ascertained person. It may be made to any 
one of the public generally, or to any one of a class of persons, who 
may accept it. These offers are sometimes said to be made "to all 
the world," but this is not correct.** Take, for instance, the case of 
a proposal by way of advertisement of a reward for the rendering 
of certain services, addressed to the public at large, such as an ad- 
vertisement for the return of lost property, or for the apprehension 
of persons who have committed a crime, or for certain information. 
This is an offer, to any one who shall accept it, of a promise for an 
act, and becomes a binding promise to pay the reward as soon as 
any individual renders the services.** 

Offers of this character are generally advertisements for such 
services as we have mentioned,, but they are not limited to them.** 
Sellers of a medicinal remedy, who, to increase their sales, advertise 

i« See Spencer y. Harding, L. B. 5 O. P. 661. Bee **Oontracts** Deo, Dig, 
iKev-yo,) I 17; Cent, Dig. §| llZ-118, 

ift Wentworth t. Day, 3 Mete. (Mass.) 352, 37 Am. Dec 146 ; Besse v. Dyer, 
9 AUen (Mass.) 151, 86 Am. Dec 747; Loring ▼. City of Boston, 7 Mete 
(Mass.) 409 ; WUsoi^ v. Gnyton, 8 Gm (Md.) 213 ; Pierson y. Morch, 82 N. Y. 
503; First Nat Bank y. Hart, 66 111. 62; Montgomery County y. Bobinson, 
86 lU. 174; Harson y. Pike, 16 Ind. 140; Goldsborough y. Cradle, 28 Md. 
477; Byier y. Stockwell, 14 Cal. 134, 73 Am. Dee. 634; Hayden y. Souger, 56 
Ind. 42, 26 Am. Bep. 1 ; Thruston y. Thornton, 1 Cuah. (Mass.) 91 ; Morse v. 
Bellows, 7 N. H. 649, 663, 28 Am. Dec 872; Janyrin y. Town of Exeter, 48 
N. H. 83, 2 Am. Bep. 185 ; Cummings y. Gann, 52 Pa. 484 ; Morrell y. Quarles. 
86 Ala. 644. As to the intention to become bound, see post, p. 60, note 28. 
Bee "Rewards,** Deo, Dig. (Key-No,) §S 5-7; Cent, Dig. f| 5-7. 

i« Seymonr y. Armstrong, 62 Kan. 720, 64 Pac. 612. A published time table 
l8 an offer by the railroad company to the public generally that, if they will 
apply for a ticket *for carriage, they will be carried as stated in the time 
table, and the offer is accepted by each person who applies for a ticket Den- 
ton y. Great Northern B. Co., 6 EL & Bl. 860; Sears y. Bailroad Co., 14 
Allen (Mass.) 433, 92 Am. Dec 780. The same doctrine has been applied in 
the case of bounties offered by towns, cities, or counties to any person who 
should enlist into the military senrlce of the United States. Crowell y. Hop- 
kinton, 46 N. H. 9. As to offers of premiums in horse races, see Alvord y. 
Smith, 63 Ind. 68w Offer by persons purchasing railroad on foreclosure and 
organizing new company to exchange new stock for old. Schorestene y. Ise- 
Un, 69 Hun, 250, 23 N. Y. Supp. 657. As to general letter of credit as oeing 
a general offer resulting In a promise to persons giying credit on the strength 



48 OFFER AND ACCEPTAXCB (Ch. 2 

that a certain sum will be paid to any person who buys and uses 
the remedy, and afterwards contracts the disease it is claimed to 
prevent, will become bound by contract obligation to any person 
who purchases and uses the remedy, and he may recover the sum 
promised if he contracts the disease.*^ 

Such a general offer may be made orally. Thus, where a per- 
son, whose wife was in a burning building, exclaimed to the by- 
standers generally that he would give a certain sum to any person 
who would bring out her body, and a man did so, it was held that 
he could recover the sum promised.** 

Acceptance and Revocation 

Offers of this character cannot result in contract obligation un- 
til they are accepted by an ascertained person by performing the 
services. Before the services are rendered, there is merely an offer, 
which may be revoked.** An acceptance by performance of the 
services after the offer has been withdrawn does not bind the pro- 
poser,*^ and it even seems that ignorance of the withdrawal makes 
no difference, if the withdrawal was as publicly made as the offer.** 
If no time is stated within which the offer is to remain open, it will 
lapse after the expiration of a reasonable time; that is, perform- 
ance of the service, to constitute an acceptance, must be within a 
reasonable time after the making of the offer or the last publica- 
tion thereof.** 

of it, see Ex parte Asiatic Banking Corp., 2 Cb. App. 891. See '^Contracts,*' 
Dec. Dig. (Kev-No.) ^ 11; Cent. Dig. S§ 112-llS. 

iTCarUll V. CarboUc Smoke-Bali CJo.. [1892] 2 Q. B. 484, 4 Rep. 176; Id., 
[1893] 1 Q. B. 256. So, wbere a person Invites architects to submit designs, 
stating that all who submit plans shall receive a certain sum, and that the 
one whose plans are the best shall be engaged as architect, he becomes bound 
to pay the sum specified to all who submit plans, and, if he adjudges one of 
the plans the best, to make that architect the architect of the building. 
Walsh V. Association, 16 Mo. App. 502; Id., 90 Mo. 459, 2 S. W. 842. See 
''Contracts;' Dec. Dig. {Key-yo.) ^ 17; Cent. Dig. §f 112-118. 

18 Reif ▼. Paige, 55 Wis. 496, 13 N. W. 473, 42 Am. Rep. 731. And see 
Hayden v. Souger, 56 Ind. 42, 26 Am. Rep. 1. See ''Rewards;* Dec. Dig. 
(Key-No.) S§ 3-7; Cent. Dig. §§ 5-7. 

i»Harson v. Pike, 16 Ind. 140; Freeman v. City of Boston, 5 Mete. (Mass.) 
56; Cummings v. Gann, 52 Pa. 484. See ^'Contracts;* Dec. Dig. (Key-yo.) f 
t9; Cent. Dig. |§ 57-60. 

20 Shuey v. United States, 92 U. S. 73, 23 L. Ed- 607; Biggers ▼. Owen, 79 
Ga. G5S, 5 S. E. 193. See ''Contracts;' Dec. Dig. (Key-No.) § 19; Cent. Dig. 
§{ 57--60. 

21 Shuey v. United States, 92 U. S. 73, 23 L. Ed. 697. See "Contracts;* 
Dec. Dig. (Key-No.) ^ 19; Cent. Dig. §§ 57S0. 

22 Loring V. City of Boston, 7 Mete. (Mass.) 409 (holding 8 yean and 8 
months more than a reasonable time); Mitchell v. Abbott, 86 Me. 338, 29 
Atl Ills. 25 L. R. A. 503, 41 Am. St. Rep. 559 (holding 12 years more than 



§ 25) OFFBB8 TO THE PUBUO OIBNEBAIXT 49 

r 

Performance of Services in Ignorance of Offer — Motive 

Suppose that the person performing the service does not know of 
the offer, or does not realize all its terms, does he thereby accept 
the offer and acquire a right to the reward ? In a leading English 
case a reward had been offered by the defendant for information 
which was supplied by the plaintiff, but not with a view to the re- 
ward. The report of the case does not show that the plaintiff was 
unaware of the offer; the only point which seems to have been 
raised being that the reward was not the motive which induced the 
plaintiff to supply the information. The court held that the motive 
was immaterial, and that "there was a contract with the person 
who performed the condition mentioned in the advertisement." ■• 

In this country, some courts, influenced in large measure by a 
misconception of the point decided in Williams v. Carwardine, have, 
held that ignorance of the offer does not prevent a recovery of the 
reward by the person performing the services.** The better rule, 
however, and that supported by the weight of authority, is that the 
reward may not be recovered by one who performs the services 
in ignorance of the offer.** "To the existence of a contract," it 
was said in the leading American case,** "there must be mutual as- 
sent, or, in another form, offer and consent to the offer. The mo- 
tive inducing consent may be immaterial, but the consent is vital. 
Without that, there is no contract. How, then, can there be con- 
sent or assent to that of which the party has never heard?" It has 

a reasonable time) ; Sliaub v. Lancaster, 156 Pa. 362, 26 Atl. 1(^7, 21 L. R. A. 
6D1 (holding 17 years from the first offer and 10 years from the last publi- 
cation more than a reasonable time). In In re Kelly, 39 Conn. 159, it was 
held that the offer of a reward for the arrest of a person guilty of a par- 
ticular crime would not lapse until prosecution was barred by the statute of 
Umitations. Bee "Contracts;' Dec. Dig. {Key-No,) | 20; Cent, Dig. §§ 61-10, 

2« Williams v. Carwardine, 4 Barn. & Adol. 621, 6 Eng. Rul. Cas. 133. Bee 
*'Contract9y" Dec. Dig, {Key-No,) § 22; Cent. Dig. U 82-92; ''Rewards^' Dee. 
Dig, {Key-No.) %% S-1 ; Cent. Dig. %% S-7, 

s«Dawkins v. Sapplngton, 26 Ind. 199; Russell v. Stewart, 44 Vt 170; 
Auditor v. Ballard, 9 Bush (Ky.) 572, 15 Am. Rep. 728; Eag:1e v. Smith, 4 
Houst (Del.) 293 ; Cra,wshaw v. City of Roxbury, 7 Gray (Mass.) 377 ; Ever- 
man v. Hyman, 26 Ind. App. 165, 28 N. E. 1022, 84 Am. St Rep. 2S4. See 
''Reicards;* Dec, Dig, {Key-No.) § 7; Cent. Dig. § 7. 

zBintch ▼. Snedaker, 38 N. Y. 248, 97 Am. Dec. 791; Howland v. Lounds, 
51 N. Y. 604, 10 Am. Rep. 654 ; Marvin ▼. Treat, 37 Conn. 96, 9 Am. Rep. 307 ; 
Stamper ▼. Temple, 6 Humph. (Tcnn.) 113, 44 Am. Dec. 296; Wniiams ▼. 
RaUway Ck)., 191 111. 610, 61 N. E. 456, 85 Am. St Rep. 278. BROADNAX v. 
LEDBETTER, 100 Tex. 375, 99 S. W. 1111, 9 L. R. A. (X. S.) 1057, Throck- 
morton Caa Contracts, 27. See ^'Rewards;* Dec. Dig. {Key-No.) § 7; Cent. 
Dig. I 7. 

a« Fitch v. Snedaker, 38 X. Y. 248, 97 Am. Dec. 701. See "Rewards,*' Dec. 
Dig. {Key-No,) 8 7; Cent, Dig, | 7. 

Clabk Co NT. (3d Ed.) — 4 



50 OFFBB AND ACCBPTANCB (Cb. 2 

/ 

even been held, contrary to the point actually decided in Williams 
V. Carwardine, that the motive in performing the services is ma- 
terial, and that there must at the time be an intent to claim the 
reward, as well as knowledge that it is offered.'^ 



OFFEi; AS REFERRING TO LEGAL RELATIONS 

26. The offer must be intended to create^ and, be capable of creat- 
ing, legal relations. 

• 
Intention to Create Legal Relations 

In order that an offer or proposal may be turned into a binding 
contract by acceptance, it must be made in contemplation of legal 
consequences. A mere statement of intention, for instance, made in 
the course of conversation, will not result in a binding promise, 
though acted upon by the party to whom it was made."* Thus, 
where a father said to a man that he would give a certain sum to 
him who married his daughter with his consent, and the man 
married her, and sued for the money, it was held 'that he could not 
recover, as it was not reasonable that a man "should be bound by 
general words spoken to excite suitors/' *• Nor will services ren- 
dered for another and accepted by him place him under a contrac- 
tual obligation to pay for them, where payment therefor was not 
expected nor intended.** 

•T Hewitt T. Anderson, 56 GaL 476, 38 Am. Rep. 65. Bee '*R6ward9,^ Dea 
Diff. {Key-No.) § 7; Cent Dig. | 7. 

s< Week ▼. Tlbold, RoUe, Abr. 6; Randall ▼. Morgan, 12 Yes. 67; Stamper 
v. Temple, 6 Humph. (Tenn.) 113, 44 Am. Dec. 296 ; Stagg ▼. Gompton, 81 Ind. 
171 ; Erwin ▼. Erwin, 25 AUl. 236 ; Carson ▼. Lucas, 13 B. Mon. (Ky.) 213 ; 
Henderson Bridge Go. ▼. McOratb, 134 U. S. 260, 10 Sup. Ct 730, 33 L. Ed. 
934; Kirksey y. Kirksey, 8 Ala. 131; Lakeside Land Go. ▼. Dromgoole, 89 
Ala. 606, 7 South. 444; Thruston ▼. Thornton, 1 Gush. (Mass.) 89; Higgins 
▼. Lesslg, 49 111. Appw 459. Statements by a married child that she intends 
to pay her parents for support, made to third persons, result in no contract 
on her part Perkins v. Westcoat, 3 Colo. App. 338, 33 Paa 139. The rule 
above stated applies to offers of reward made to the public generally. Stam- 
per V. Temple, 6 Humph. (Tenn.) 113, 44 Am. Dec. 296; Higgins y. Lesslg, 
49 lU. App. 459. See, also, Ulrich y. Arnold, 120 Pa. 170, 13 AtL 831. See 
**Contracts,** Dec. Dig. (Key-No.) H U, 16; Cent. Dig. | 60. 

t» Week y. Tibold, supra. And see Randall y. Morgan, supra. See **Conr 
tracts,** Dec. Dig. (Key-No.) | 16; Cent. Dig. tl 49766. 

•oThe fact that services are rendered does not create a liability on the 
part of the person for whom they are rendered, even though done at his re- 
quest, where the circumstances are such as to repel the inference that com- 
pensation was intended; and, when performed merely from kindly or chari- 
table motives, the law will not imply a promise to pay for them. C!icotte v. 



§ 26) OFFEB AS BEFEBBINO TO LEGAL BELATION8 61 

On the same footing stand engagements of pleasure, or agree- 
mients which, from their nature, do not admit of being regarded as 
business transactions.*^ 

Same — Jest 

Transactions intended as a joke or jest cannot result in a con- 
tract, for the reason that there is no intention to contract ; there is 
no contemplation of legal consequences.** 

Same — Invitations to Deal 

Offers which, by acceptance, may be turned into binding prom- 
ises, must be distinguished from offers which merely amount to in- 
vitations to deal. Illustrations of this arise where merchants send 
out circulars offering goods for sale on certain terms, not intend- 
ing the circular as an offer to become binding on acceptance, but 
merely as an invitation to persons to enter into negotiations ; ** or 
where a person, wishing to have work done, or to buy goods, ad- 
vertises for proposals;** or where a person advertises that he will 
sell goods at auction.** The circulars of the merchant, the adver- 
tisement for proposals, and the advertisement of the auction sale, 
are mere declarations of intention. Legal consequences are not di- 
rectly contemplated, and no contract relation arises with persons 
who may send an order for goods, or make bids, or attend 'the auc- 
tion. The rule applies whenever it is clear that a proposition was 

Church of St Ajine, 60 Mich. 652, 27 N. W. 682. And see Govel t. Turner, 
74 Mich. 408, 41 N. W. 1091 ; Gross t. GadweU, 4 Wash. 670, 30 Pac. 1052 ; 
Sullitan T. Latimer, 88 8. G. 158, 17 S. E. 701 ; Everitt ▼. Walker, 109 N. G. 
129; 18 8. B. 860; Gollyer t. Gollyer, 113 N. Y. 442, 21 N. B. 114. See, also, 
ante, p. 20, and cases cited. Bee ^'Contract*,'' Deo. Dig. {Key-Ho.) % 16; Cent 

•t Anson, Cont (4th Ed.) 19; ante, p. 6w 

•sMcClurg T. Terry, 21 N. J. Eq. 225; Armstrong y. McQhee, Add. (Pa.) 
261 ; Keller ▼. Holderman, 11 Mich. 248, 83 Am. Dec. 737 ; Bruce ▼. Bishop, 
43 Vt 161. Marriage ceremony performed in jest, but by a person duly au- 
thorized. McClurg V. Terry, supra. Bee "Contraoti,** Deo, DUf. iKey-No,) | 
16; Cent, Dig. §§ 49-56. 

■» GHEROKEE TANNING BXTRAGT GO. ▼. WESTERN UNION TELE- 
GRAPH GO., 143 N. G. 876, 55 S. E. 777, 118 Am. St Rep. 806, Throckmorton 
Gas. Gontracts, 31 ; Spencer y. Harding, L. R. 5 G. P. 561 ; Moulton ▼. Ker. 
Shaw, 59 Wis. 316, 18 N. W. 172, 48 Am. Rep. 516 ; Lincoln v. Preserving CJo., 
132 Mass. 129; Knight y. Gooley, 34 Iowa, 218; Topliff y. McKendree, 88 
Mich. 148, 50 N. W. 109 ; Allen y. Klrwan, 159 Pa. 612, 28 Atl. 495 ; Smith y. 
Weaver, 90 lU. 892; Zeltner y. Irwin, 25 App. Div. 228, 49 N. Y. Supp. 337. 
See ''Sales,** Dec. Dig. (Key-Vo.) %% 22, 2S; Cent Dig. f| 39-48. 

•4 Howard y. Industrial School, 78 Me. 230, 8 Atl. 657; Leskle y. Hasel- 
stine, 155 Pa. 98» 25 Atl. 886; Topping y. Swords, 1 E. D. Smith (N. Y.) 609. 
See ''Contracts;* Deo. Dig. (Keg-No.) | 17; Cent Dig. %^ 112-118. 

•i Harris t. Nickerson, L. R. 8 Q. B. 28a Bee "Bales,** Deo. Dig. (feih 
Vq.) U ^f ^; Oent. Dig. H S9-48. 



62 OFFER AND ACCBPTANCB (Ch. 2 

intended merely as an invitation to deal, and not as an offer to be- 
come binding on acceptance.** 

Same — Incomplete Negotiations 

Similar to these cases are those in which the parties are carrying 
on negotiations, and have not yet come to an agreement. So long 
as the negotiations are incomplete, there is no contract.*^ "An 
agreement to be finally settled must comprise all the terms which 
the parties intend to introduce into the agreement. An agreement 
to enter into an agreement upon terms to be afterwards settled be- 
tween the parties is a contradiction in terms. It is absurd to say 
that a man enters into an agreement till the terms of that agree- 
ment are settled." •• 

So, also, if the parties come to an agreement as to terms, but 
with the intention that their agreement is to be reduced to writing,' 
and that they are not to be bound until this is done, there is no con- 
tract until the writing is drawn up and assented to by both as their 

»• CHEROKEH) TANNING EXTRACT CO. v, WESTERN UNION TELE- 
GRAPH CO., 148 N. C. 876, 55 S. E. 777, 118 Am. St Rep. 806, Throckmorton 
Ca& Contracts, 3L In Monlton ▼. Kershaw, 59 Wia 316, 18 N. W. 172, 48 
Am. Repw 516, the defendants wrote plaintiff: '*We are authorized to offer 
Michigan fine salt, in full carload lots of 80 to 95 bhls., delivered at your 
city, at 85c per bbl. • * • Shall be pleased to receive your order," — and 
the plaintiff at once replied, ordering 2,000 barrels, but the defendants re- 
fused to fill the order. The court held that defendants* letter was a simple 
notice that they were in a condition to supply salt for the price named, and 
an invitation to deal with them, and not an offer which plaintiff <H)uld 
change, into a binding promise by his order. See, also, Beaupr4 v. Telegraph 
Co., 21 Minn. 155; Kinghome v. Telegraph Co., U. C. 18 Q. B. 60; Lyman 
V. Robinson, 14 Allen (Mass.) 254; Smith v. Gowdy, 8 Allen (Mass.) 560; 
Schenectady Stove Co. v. Holbrook, 101 N. Y. 45, 4 N. E. 4 ; Harvey v. Pacey, 
1 Rep. 428; Id., [1898] App. Cas. 552; Patton v. Amey, 95 Iowa, 664, 04 
N. W. 635. Cf . Keller v. Ybarru, 8 Cal. 147 ; College MUl Co. v. Fldler (Tenn. 
Ch.) 58 S. W. 382; Zeltner v. Irwin, 25 App. Div. 228. 49 N. Y. Supp. 337 
[reversing 21 Misc. Rep. 13, 46 N. Y. Supp. 852]. See "Auctions and Aucstionr 
eers;' Dec. Dig, {Key-No,) §| 7, 8; Cent, Dig. §S tO-40, 

»T Lyman v. Robinson, 14 Allen (Mass.) 242; Schenectady Stove Co. v. Hol- 
brook, 101 N. Y. 45, 4 N. E. 4 ; Bean v. Clark (C. C.) 30 Fed. 225 ; Templeton 
V. Wile (City Ct.) 3 N. Y. Supp. 0; Commercial Tel. Co. v. Smith, 47 Hun 
(N. Y.) 494; Morris T. Brightman, 143 Mass. 149, 9 N. B. 512; Ward'ell v. 
Williams, 62 Mich. 50, 28 N. W. 796, 4 Am. St Rep. 814; Shaw v. Glass 
Works, 52 N. J. Law, 7, 18 Atl. 096 ; Whlteford v. Hitchcock, 74 Mich. 208, 
41 N. W. 808 ; Gates v. Nelles, 62 Mich. 444, 29 N. W. 73 ; Canning v. Far- 
quhar, 16 Q. B. Div. 727. 55 L. J. Q. B. 225; Strong & Trowbridge Co. v. 
H. Baars & C3o., 60 Fla. 253, 54 South. 92. And see ante. p. 35. See "Con- 
tracts,** Dec, Dig. (Key-yo,) § 16; Cent, Dig. §| 40-56. 

«• Ridgway v. Wharton. 6 H. L. Cas. 208. And see Shepard v. Carpenter, 
54 Minn. 153, 55 N. W. 906; Sibley v. Felton, 156 Mass. 273, 31 N. E. 10; 
Strobrldge Lithographing Co. v. Randall, 73 Fed. 619, 19 C. a A. 611; St. 



§ 26) OFFEB AS BEFERRINQ TO LBQAIi BEL^TIOMS 53 

agreement.** If they icome to a final agreement as to terms, it may, 
indeed, bind them, though they intend to reduce the terms ipto 
writin|j for the purpose of becoming bound in a more formal man- 
ner, or of preserving a memorial of the terms, or for any purpose 
other than that of making the writing exclusively their agree- 
ment.** The question is whether they intend legal consequences 
before the formal written evidence of their agreement is executed. 
If they do not, there is no contract until this is done; but, if they 
do intend to be bound without regard to the writing, there is a con- 
tract.*^ The question is one of fact; but the circumstance that 
they do intend a subsequent writing to be drawn up is said to be 
strong evidence that they do not intend to be bound by the prelim- 
inary agreement.** 

Same — Delivery 

It is sometimes said that delivery is necessary to give effect to a 
written contract, and this is true where by the agreement of the 
parties it is not to take effect until delivered.** Delivery in this 
sense, however, is not a necessary element of the contract imposed 

Louis & S. F. R. Co. y. Gorman, 79 Kan. 643, IQO Pac. 647, 28 L. R. A. (N. S.) 
637. See '^Contracts;* Dec, Dig. (Key-No.) § 16; Vent, Dig. f§ ^9-^6. 

>• Ocala Cooperate Co. ▼. Florida Cooperage Co., 59 Fla. 394, 52 South. 13. 
See, also, ante, p. ?»^, See *'ConiractH,*' Dec. Dig. (Key-No.) ( 32; Cent. Dig. 
I 159. 

«• Leake, Cont 98; Rldgway y. Wharton, 6 H« U Cas. 268; Green y. Cole 
(Mo. Sup.) 24 S. W. 1058; Lewis y. Brass* L^ R. 3 Q. B. Dly. 667; Crossley 
y. Maycock, L. R. 18 Eq. 180; Sanders y. Fruit Co., 144 N. Y. 209, 39 N. E. 
75, 29 L. R. A. 431, 43 Am. St Rep. 757; C. C. Emerson & Co. y. Steyens 
Grocer Co., 95 Ark. 421, 1.30 S. W. 541; Western Rooflnf? Tile Co. y. Jones. 
«J Okl. 209. 109 Pac. 225. Ann. Cas. 1912B, 127. And see ante, p. 86. See 
'^Contracts,** Dec. Dig. (Key-No.) I 32; Cent. Dig. % 159. 

«i Winn y. Bull, 2 Ch. Dly. 29; Fowle y. Freeman, 9 Vea 351; Gibbins y. 
Asylum District, 11 Beay. 1; Hey worth y. Knight, 17 G. B. (N. &) 298; Ros- 
eiter y. Miller, 5 Ch. Dly. 648 ; Commercial Tel. Co. y. Smith, 47 Hun (N. Y.) 
494; Allen y. Chouteau, 102 Mo. 309, 14 S. W. 869; Hodges y. Sublett, 91 
Ala. 588, 8 South. 800; Lawrence y. RaUroad Co., 84 Wis. 427, 54 N. W. 
797 ; Mississippi k D. S. S. Co. y. Swift, 86 Me. 248, 29 Atl. 1063, 41 Am. St 
R^. 545; Edge Moore Bridge Works y. Bristol County, 170 Masa 528, 49 
N. E. 918. JSee, also, ante, p. 36. See **ContracU;* Dec. Dig. (Key-No.) § 32; 
Cent. Dig. | 159. 

4s Leake, Cont. 98; Ridgway y. Wharton, 6 H. Li Cas. 26& See **Contracts,'' 
Deo. Dig. (Key-No.) K 28, 29; Cent. Dig. §§ ISS-US. 

«« American Copying Co. y. Muleski, 138 Mo. App. 419, 122 S. W. 384; Llgon 
y. Wharton (Tex. Ciy. App.) 120 S. W. 930. If a contract is placed in escrow, 
ts be deliyered upon the happening of a certain eyent, its d^yery in yiolation 
of the condition does not giye it effect, because there is no meeting of minds 
or common intention to be bound. Carpenter y. Carpenter, 141 Wi& 544, 124 
N. W. 488. See ''Contracts,'' Deo. Dig. (Key-No.) § 42; Gent. Dig. U 207'-214; 
^jy«crow«,- Dec. Dig. (Key-No.) | U; Cent. Dig. U 17-20. 



54 OFFBB AND ACGBPTANCB (Cb. 2 

by law, but rather an act evidencing the final agreement of the par- 
^tie3. It would be equally competent for them to agree that the 
contract should become binding without delivery. 

Offer as Capable of Creating Legal Relations — Definiteness and Cer- 
tainty 
An offer or proposal niust be capable of creating legal relations, 
or no contract can result. An agreement cannot create an obliga- 
tion, or legal relations, unless it is capable of being enforced by 
the courts ; and, as we have seen, creation of an obligation is es- 
sential. 

It follows that, to result in a contract, the agreement must be 
sufficiently definite and certain to enable the court to collect from it 
the full intention of the parties, for the court cannot make an agree- 
ment for them.** The parties may have come to a real agreement, 
but they must take the chances of not having made it intelligible.*^ 
It is generally said that the contract or the agreement or the prom- 
ise must be certain, but it is the same thing to say that the offer 
must be certain. An uncertain offer is sometimes apparently rem- 
edied by its acceptance, but this is not really so, for an acceptance 
must be identical with the terms of the offer. If it varies from 
them, as it must in order to remedy uncertainty in the offer, it is 
not an acceptance, tut a counter offer. 

The rule, then, is that the offer must not be so indefinite as to 
make it impossible for the court to say what was promised.** Thus, 
where a person bought a horse, and promised that, if it was lucky 
to him, he would give a certain additional sum, "or the buying of 
another horse," it was held that the promise was too loose and 

44 Thomson y. Gortner, 73 Md. 474 21 Atl. 871; Marble y. Oil Co., 169 
Mass. 558, 48 N. E. 785 ; In re Puryes' Estate, 196 Pa. 438, 46 Atl. 369 ; Faulk- 
ner y. Drug Co., 117 Iowa, 120, 90 N. W. 585 ; Butler y. Kemmerer, 218 Pa. 
242, 67 Atl. 332 (collecting cases) ; Nortbnip y. Colter, 150 Mo. App. 639, 131 
S. W. 364. Uncertainty as to price or terms of payment on sale of land. 
George y. Conhaim, 38 Minn. 338, 37 N. W. 791 ; Smoyer y. Roth (Pa. Sup.) 
13 Atl. 191 ; Everett y. Dilley, 39 Kan. 73, 17 Pac. 661. See •'Contracti,'* Deo. 
Dig. (Key-No.) § 9; Cent. Dig. U lO-ftO. 

«» Pol. Cont. 42. 

*• CHEROKEE TANNING EXTRACT CO. y. WESTERN UNION TELE- 
GRAPH CO., 143 N. C. 876, 65 S. E. 777, 118 Am. St Rep. 806, Throckmorton 
Cas. Contracts, 31; Guthing y. Lynn, 2 Barn. & Adol. 2^2; Sherman y. Kits- 
miller, 17 Serg. & R. (Pa.) 45 ; Freed y. Mills, 120 Ind. 27. 22 N. B. 86 ; Thorn- 
son y. Gortner, 73 Md. 474, 21 Atl. 371 ; Erwin y. Erwin, 25 Ala. 236 ; Northrup 
y. Colter, 150 Mo. App. 639, 131 S. W. 364; Gray y. Toledo, St L. & W. 
R. Co., 143 Mo. App. 251, 128 S. W. 227; Haryey y. Facey, L. R. [18931 Appt 
Cas, 552. Bee ''Contracts,** Deo. Dig. {Key-No,} ( 9; Cent. Dig. U lO-tO. 



§ 86) OFFBB A8 lUSFBBRINO TO LBOAL RELATIONS B5 

vague to be considered in a court of law/^ And so, where a per- 
son agrees to perform services for such remuneration as shall be 
deemed right, or for such wages as his employer shall deem right 
or reasonable, or for ''good wages/' it is held that there is not a 
sufficiently definite promise of payment to be capable of enforce- 
ment.** 

Same — "Id Cerium est Quod Cerium Reddi Poiesf* 

This rule, however, is subject to the maxim, "Id certum est quod 
certum reddi potest" *• For this reason an oflFer to sell goods need 
not necessarily specify the amount that may be ordered, but may 
leave it for the person to whom the offer is made to specify the 
amount in his acceptance. If this is the intention of the parties, the 
acceptance concludes the contract, and does not amount to a coun- 
ter proposal necessary to be accepted.*® The intention is import- 
ant here, in order to distinguish these cases from those in which it 
is held that the acceptance does not conclude a contract because the 
proposer did not intend to affect his legal relations, but merely to 

«T Oathing y. Lynn, supra. See **Contracts,** Deo, Dig, (Key^No,) ^ 9; Cent. 
Dig, II 10-ZO. 

«• Taylor t. ^rewer, 1 Manle & S. 290; Roberts ▼. Smith, 4 Hurl. & N. 816; 
Fairplay School Tp. v. O'Neal, 127 Ind. 95, 26 N. E. 686. But see Caldwell^v. 
School Dlst (G. G.) 55 Fed. 872; Henderson Bridge Go. v. McQrath, 134 U. 
8. 260, 10 Sup. Gt 730, 33 1* Ed. 984. The following promises have been held 
▼old for uncertainty: To give a person a house, and provide for her at 
promisor's death, if she would live with him. WaU's Appeal, 111 Pa. 460, 5 
AtL 220, 56 Am. Rep. 288. To let a person retain possession of property on 
his paying the same rent the promisor "might be able to obtain from other 
parties." Gelston v. Sigmund, 27 Md. 334. That a person should have 
preference in renting of property so long as it should be rented for store. 
Delashmutt v. Thomas, 45 Md. 140. To take a house "if put into thorough 
repair," and if the drawing rooms were "handsomely decorated, according 
to the present style." Taylor v. Portington, 7 De Gex, M. O. 82a To sell 
land, reserving "the necessary land for making a railway." Pearce v. Watts, 
20 Eq. 492. Agreement by which a person is to work in a mine, and receive 
a certain sum per ton on all ore produced, as long as the mine can be made 
to pay. Davie v. Mining Co., 93 Mich. 491, 53 N. W. 625, 24 L. R. A. 357. 
Promise to take note for certain sum, without specifying terma Van Schaick 
V. Van Buren, 70 Hun, 575, 24 N. Y. Supp. 306. On order for goods which 
does not state the quantity, quality, or price to be paid. Price ▼. Stipek, 
39 Mont 426, 104 Pac 195. A promise to divide a profit, if any is made, 
on a very liberal basis. Butler v. Kemmerer, 218 Pa. 242, 67 AtL 332. See 
^'ConiractM,** Dee. Dig. (Key-No.) | 9; Cent. Dig. || 10-^0. 

«• Parker v. Pettit, 43 N. J. Law, 512; Miller v. Kendig, 55 Iowa, 174. 7 
N. W. 500; Thompson v. Stevens, 71 Pa. 161. See **Contracts," Dec. Dig. 
{Key-No.) | 9; Cent. Dig. || 10^20. 

•0 Dambmann v. I^rentz, 70 Md. 880, 17 AU. 889, 14 Aul St Rep. 364. See 
''OontraetM,'' Deo. Dig. (Key-No.) | 9; Cent. Dig. |§ lO-ZO. 



56 OFFER AND ACCBPTANOi (Ch. 2 

invite negotiations.*^ 'For the same reason it is not necessary, in 
offering to sell goods, to name the price, for, if no price is specified, 
a seasonable price will be implied. Other illustrations of the appli* 
cation of this rule are given below.*' 

Satne — Capacity vf Parties — Form — Consideration — Legality of Ob-- 
ject 
In order that an offer be capable of creating legal relations, (a) 
it must be made by and to a party capable of contracting; (b) it 
must be made in the form prescribed by law ; (c) if it is to be ac- 
cepted by the giving of a promise, it must be a consideration for 

•lAnte, p. 51. 

OS The following contracts hare been held sufficiently certain: Contract 
making extent of promisor's liability such as may be imposed by a certain 
statute. Town of Hamden t. Merwin, 54 Conn. 418^ 8 Atl. 070. A promise to 
bay all the suppUes of a certain kind the promisor may need. Lens t. Brown, 
41 Wis. 172; Leyey t. Railroad , Co., 4 Misc. Rep. 415, 24 N. Y. Supp. 124; 
Minnesota Lumber Co. y. Coal' Co., 160 III. 85, 43 N. E. 775, 31 L. R. A. 529; 
Hickey T. O'Brien, 123 Mich. 611, 82 N. W. 241, 49 L. R. A. 594, 81 Am. St 
Rep. 227. See post, p. 149.. A promise to sell aU the future produce of a 
certain vineyard the promisee may wish. Keller t. Ybarru, 3 Cal. 147. And 
see Bates t. Childers, 5 N. M. 62, 20 Pac 104 ; Booske v. Ice Ca, 24 Fla. 550, 
5 South. 247; McCall Co. y. Icks, 107 Wis. 232, 83 N. W. 300. Deflniteness 
as to territory in which party shall have exclusive right to sell goods, — 
"in D. and the territory tributary thereto." Kaufman y. Manufacturing Co., 
78 lo^^, 679, 43 N. W. 612, 16 Am. St Rep. 462. Cf. Hauser y. Harding, 
126 N. C. 295, 35 S. E. 586. Describing a party as ''Mr. Lee" does not render 
the contract uncertain, as it may be explained by paroL Lee y. Cherry, 85 
Teun. 707, 4 S. W. 835, 4 Am. St. Rep. 800. Promise to erect "a good steam 
sawmill." Fraley y. Bentley, 1 Dak. 25, 46 N. W. 506. Sale of a stock of 
merchandise, "all soiled or damaged goods at valuation." Sergeant v. Dwyer, 
44 Miim. 309, 46 N. W. 444. Promise to employ a person "for 12 months 
commendng not later than the 15th of July, possibly the 1st of July, the date 
to be fixed by" the promisee. Troy Fertilizer Co. v. Logan, 96 Ala. 619, 12 
South. 712. Agreement to furnish a person with "steady and permanent em- 
ployment" Pennsylvania Co. v. Dolan, 6 Ind. App. 100, 32 N. E. 802, 51 Am. 
St Rep. 289. See, also, Carnig v. Carr, 167 Mass. 544, 46 N. E. 117, 35 
L. R. A. 512, 57 Am. St Rep. 488. Agreement to furnish a certain number of 
car loads of lumber, a car load varying from 35,000 to 60,000 feet Indianapo- 
lis Cabinet Co. v. Herrmann, 7 Ind. App. 462, 34 N. E. 579. Sale of nine 
walnut trees standing on the vendor's land, marked when the sale Is made. 
Carpenter v. Medford, 99 N. C. 495, 6 S. E. 785, 6 Am. St Rep. 535. Con- 
tract with provision that it should be renewed for further term if plaintiff 
succeeded in doing such a bu.siuess as defendant might "reasonably expect" 
Worthington v. Beeman, 91 Fed. 232, 33 C. C. A. 475. Contract providing 
for a "reasonable compensation." Wehner v. Bauer (C. C.) 160 Fed. 240. 
Contract to pay a sum which will be "right" or "satisfactory." Silver v. 
Graves, 210 Mass. 26, 95 N. E. 948. Contract to pay "a fair and equitable 
share of the net profits" of a business. Noble v. Joseph Burnett Co., 208 
Mass. 75, 94 N. E. 289. See '^Contracts'* Dec. Diff. (Keu-Ko.) | 9; Cent. Dig. 



S 26) OFFBB AB RfiFEBBINa TO LBOAL RELATIONS 67 

the promise ; and, if it is an offer of a promise, the act, forbearance, 
or promise asked in return must be a .consideration ; and (d) the 
act or forbearance done or contemplated must be lawful. These 
matters will be discussed in subsequent chapters, dealing with the 
capacity of parties, form, consideration, and legality of the object 
of contracts. 




58 CONTRACTS UMDSB SBAIi (Ch. 3 



CHAPTER III 

CLASSIFICATION OF CONTRACTS— CONTRACTS UNDER SEAL AND 

CONTRACTS OF RECORD 

27. Classification of Contracta 

2a Contracts of RecorcL 

29. Contracts Under SeaL 

80-^2. How Contracts Under Seal are Mad& 

33. Characteristics of Contract Under SeaL 

84. Necessity for Contract Under Seal. 

In the last chapter we dealt with the mode in which the common 
intention of the parties must be communicated, and showed how it 
must refer to legal relations, in order that it may form the basis of 
a contract. It is not enough, however, that the common intention 
of the parties be communicated in the mode we have described, and 
that the parties intend legal consequences. Most systems of law 
require some further evidence of the intention of the parties, with-* 
out which mere intention will not avail to create an obligation be- 
tween them. In our law this evidence is supplied by form and con- 
sideration. Sometimes one, sometimes the other, and sometimes 
both are required to render a contract yiforceable. By "form" is 
meant some peculiar solemnity attaching to the expression of agree- 
ment ; by "conside ration." some gain to the £artx.piaking the proqi- 
ise^ arising from the act or forbearance, given or promise d^ of Jh e 
promisee, or some'"3etriment suffered by the promisee.^ 



CLASSIFICATION OF CONTRACTS 

27. Contracts are divided into— - 

(a) Contracts dependent for their validity upon their form sQcne, 

or strictly formal contracts. These are; 

(1) Contracts of record. 

(2) Contracts imder seal. 

(b) Simple or parol contracts, which may be divided into— 

(1) Such as are dependent for their validity both on their 
form and on the presence of consideration. These 
are contracts not under seal, nor of record, but which 
are required by law to be in writing, either with or 
without a particular form. 

t Anson, Cont (Sth Ed.) 43. Tbe student will do well to read in this con- 
nection what Anson says in regard to the history and development of the 
^•ctrinefl of form and consideration. See Anson, Cont (Sth Ed.) piK 43-48. 



§ 27) CLASSIFICATION OF GONTBAOTS 69 

(2) Such as are dependent for their validity upon the pres- 
ence of consideration alone, no form at all being re- 
quired. 

Sir William Anson divides contracts into (a) formal contracts, 
or contracts dependent for their validity upon their form, under 
which he classes (1) contracts of record, and (2) contracts under 
seal; and (b) simple contracts, or contracts which he declares to 
be dependent for their validity upon the presence of consideration, 
and under which he classes (1) contracts required by law to be 
in some form other than under seal, and (2) contracts for which no 
form is required'. This classification, however, has been objected 
to on the ground "that a contract which the law requires to be in* 
writing, such as a promissory note or a guaranty, is as much de- 
pendent for its validity upon the form, and is as truly a formal 
contract, as one under seal. The latter, requires only a writing and 
a seal, the former a writing and a consideration; but the writing 
in this instance is just as essential as is the consideration."' 

There are two classes of contracts which at commo n law de n er^d 
for theif validity upon the ir for^p plnn^. These jar^ vPntracta Jindfir 
s eal and contracts of record. They are strictly formal contracts. 
All other contracts are called "simple" ot "parol" contracts, and 
depend for their validity upon. the presence of consideration. Some 
of these contracts are also required to be in writing, as in the case 
of bills of exchange and promissory notes, in the case of which a 
particular form is also required, and contracts within the statute of 
frauds; so that they depend for their validity upon their form as 
well as upon the presence of consideration. Simple contracts, not 
required by the common law or by statute to be in writing, may be 
made by word of mouth, or by conduct, as we have explained in 
treating of offer and acceptance. They need no particular form, 
but depend for their validity upon the presence of consideration 
alone. 

We have, then, three classes of contracts : (a) Contracts of rec- 
ord ; (b) contracts under seal ; and (c) simple or parol contracts ; or, 
if we classify according as a contract depends for its validity upon 
form or consideration, or both, we have : (a) Contracts dependent 
for their validity upon their form alone, or (1) contracts of record, 
and (2) contracts under seal ; (b) simple or parol contracts, which 
are dependent for their validity both on their form and on the 
presence of consideration, or contracts required to be in writing, 
but not under seal nor of record; and (c) simple or parol contracts, 

t Brantly, Cont 83. 



60 CONTRACTS UNDBB SBAL (Ch. 8 

for which no form at all is required, and which depend for their 
validity upbn the presence of consideration alone. 

All of these contracts, except contracts under seal and contracts 
of record, are called "simple" or "parol" contracts. The word 
" parol" strictly means "bv wo rd of m outh/' an d excludes writing ; 
but the term i s applied to all si mple contracls, whether they arc 
merely oral or required to be in writing . They all require consid- 
eration, the only aistmction being in the fact that some must be in 
writing.* 

We shall now deal with the contracts of record and contracts un- 
der seal, and in following chapters with those forms which are 
superimposed upon simple contracts, and with consideration, the 
requisite common to all simple contracts. 



CONTRACTS OF RECORD 

28. The obligations which are styled "contracts of record'* are: 

(a) Judgments of courts of record, whether entered by consent 

or rendered in invitum. In the latter case, however, the 
obligation is quasi contractual, and not contractual. 

(b) Recognizances, which are obligations, entered into before a 

court of record, to do or forbear from doing a certain 
thing under a penalty. 

Judgments 

A judgment of a court of record awarding a sum of money to one 
oi two litigants, either by way of damages or for costs, lays an 
obligation upon the other to pay the sum awarded. The judgment 
is entered upon the record of the court, and for this reason is called 
a "formal" contract. This obligation may come into existence as 
the final result of litigation when the court pronounces judgment, 
or it may be created by agreement between the parties before litiga- 
tion has commenced, or during its continuance. In the latter case 
there is agreement,. and the agreement results in obligation. The 
judgment, therefore, has the features of contract. In the former, 
however, there is no consAnt on the part of the person bound, and 
the obligation, therefore, is not contractual, but quasi contractual.^ 

» RANN T. HTGHES, 7 Term R. 850, Throckmorton, Gas. Ck)ntracts, 84 ; 
Wbltehlll T. WUson, 8 Pen. & W. (Pa.) 405, 24 Am. Dec. 326; t^errlne v. 
Cheeseman, 11 N. J. Law, 174, 19 Am. Dec. 888 ; Stabler y. Cowman, 7 Gill 
& J. (Md.) 284. See post, p. 70. iSco '^Contracts:' Dec. Dig. (Key-yo,) If 
SO-^2 : Cent. Dig. H lU-Ul. 

♦ O'BRIEN V. YOUNG, ©5 N. T. 428, 47 Am. Rep. ©4, Throckmorton, Gas. 
Contracts, 36, In which It is said, per Earl, J.: **The most Important elements 



§ 28) OONTBACTS OF RBOOKD . 61 

Where the judgment is entered by agreement, the obligation results 
from a contract for the making of which certain formalities are 
required,^-either a warrant of attorney, by which one party gives 
authority to the other to enter judgment upon terms settled, or a 
cognovit actionem, by which the one party acknowledges the right 
of the other in respect of the pending dispute, and then gives a 
similar authority,* 

Characteristics of Judgment — Estoppel 
The characteristics of an obligation of this nature are these : 

(1) Its terms, so long as it has not been regularly vacated or 
reversed, admit of no dispute, but are conclusively proved by a 
production of the record. The judgment, however, to be so con- 
clusive, must be valid. It must have been rendered by a court 
having jurisdiction of the subject-matter and of the parties, and 
must have been properly entered of record.* 

Same — Merger — Res Judicata 

(2) As soon as it is created, the previously existing rights with 
which it deals merge or are extinguished in it. For instance^ where 
a person sues another for breach of contract, or for a civil injury, 
and a judgment is entered, either by consent or after trial, neither 
fparty has any further rights in respect of the cause of action. The 
judgment conclusively settles their rights, and the matter is said 
to be res judicata.^ Difficulties arise in applying the doctrine, but 

of a contract are wanting. There la no aggregatio menttnm. The defendant 
has not rolontarUy assented. AU the authorities assert that the existence of 
parties legally capable of contracting is essential to every contract, and yet 
they nearly all agree that Judgments entered against lunatics and others in- 
capable in law of contracting are conclusively binding until yacated or* re- 
versed." To the same effect, see Morley t. Lake Shore & M. S. R. Ck)., 145 
U. S. 162, 18 Sup. Ct 54, 36 L. Ed. 925. Contra, Rockwell ▼. Butler. 17 Oolo. 
290, 29 Pac. 458, 17 L. R. A. Oil. And see note 17 L. R. A. 611; ante, p. 10; 
post, p. 634. Bee ''Judgment," Dec^ Dig, {Key-No.) | S, 

« See Leake, Cont 89-95. 

• Vooght T. Winch, 2 Bam. & Aid. 662; The Rio Grande ▼. Otis, 23 Wall. 
458, 23 L. Bd. 158 ; Osage City Bank ▼. Jones, 51 Kan. 379, 32 Pac. 1096 ; Le 
Grange's Lessee t. Ward, 11 Ohio, 258; Penny wit v. Foote, 27 Ohio St. 600, 
22 Am. Rep. 340 ; Burwell t. Burgwyn, 105 N. C. 498, 10 S. E. 1099 ; Suber 
T. Chandler, 36 S. C. 344, 15 S. E. 426; Junkans v. Bergin, 64 CaL 201, 30 
Pac. 627 ; Strong y. Lawrence, 58 Iowa, 65, 12 N. W. 74 ; Holllster t. Abbott, 
81 N. H. 442, 61 Am. Dec 342; post, p. 617. Be^ "Judgment;* Dec Dig. 
iKey-No.) | 6S4; Cent. Dig. f 1150. 

T Smith y. Nichols, 6 Bing. N. C. at page 220; Harrington y. Harrington, 
154 Mass. 517, 28 N. E. 908; Todd y. Stewart, 9 Q. B. 759; Oregonian Ry. 
Co. v. Nayigation Co. (C. C.) 27 Fed. 277 ; Burlen y. Shannon, 99 Mass. 200^ 
96 Am. Dec. 733 ; HUl y. Morse, 61 Me. 541 ; post, p. 699. Bee ''Judgment," 
Deo. Dig. {Key-No.) || 540, 560; Cent. Dig. H 999-lOOt, 1019. 



62 CONTRACTS UNDER SBAL (Ch. 8 

it would be beyond the scope of a book on contracts to go into the 

subject. 

Same — Remedies of Creditor 

(3) The judgment creditor, or person in whose favor the judg- 
ment is entered, has certain advantages which an ordinary creditor 
does not possess. He has a double remedy for his debt. He can 
take out execution on the judgment, and so obtain directly the 
sum awarded, and he can also bring an action on the judgment for 
nonfulfillment of the obligation.* 

Recognizance 

A recognizance is an obligation of record entered into generally, 
but not necessarily, in a criminal case, before some court of record 
or magistrate duly authorized, with condition to do some particular 
act ; as, for instance, to appear at court as a witness, or for trial, to 
keep the peace, or to pay a debt* 



CONTRACTS UNDER SEAL 



29. Contracts under seal, otherwise called ''deeds*' or ''specialties,*' 
derive their validity, at common law, from their form 
alone, and not from the fact of agreement or consideration. 

It is often said that the seal imports a consideration, but, as we 
shall see, this is incorrect. At common law the question of consid- 
eration is altogether immaterial. The form alone gives the contract 
its validity." 

All contracts under seal are called "deeds" or "specialties." We 
generally use the term "deed" as applying to conveyances of land, 
but it applies as well to all contracts under seal. Particular con- 
tracts under seal, deeds, or specialties are: (1) Grants or convey- 
ances of land, in which the parties are called respectively "grantor" 
and "grantee;" (2) bonds, which are obligations conditioned upon 
the payment of money, or the doing or forbearance from doing 
some act, the parties to a bond being called respectively "obligor" 
and "obligee;" and (3) covenants, which are agreements between 
two or more persons, entered into by deed — that is, under seal — 

8 Jones T. WUllams, 13 Mees. & W. 628. Bee "Judffment,^ Dec. Dig. {Key- 
No.) I 900; Cent. Dig. % 1719. 

• Black, Law Diet tit "Kecognlzance ;" 2 Bl. Comm. 841. It is not signed 
by the party entering Into It People v. Barrett, 202 IlL 287, 67 N. E. 23, 63 
L. R. A. 82, 05 Am. St Rep. 230. Bee ^'Reoognizanoe^'' Deo. Dig. (Key-No.) % 
1; Cent Dig. |S 1^19. 

10 Leake, Cont 76. 



C/7 / 



§S 80-32) HOW OONTBACTS XmDEB 8BAL ABB MADB 63 

whereby one or more of them promises the other or others the per- 
formance or nonperformance of certain acts, or that a given state of 
things does or shall or does not or shall not exist, the parties being 
called respectively "covenantor" and "covenantee.* 



»« 



HOW CONTRACTS UNDER SEAL ARE MADE 

30. A deed must be in writing, and must be sealed and delivered, 

and possibly signed. 

31. It takes e£Fect from the date of its delivery. 

32. ESCROW— A deed may be delivered to a third person to be 

delivered to the other party to it on the performance of a 
condition, and in such case takes e£Fect, on performance 
of the condition, from the date of the original delivery. 

A deed must be in writing or printed on paper or parchment." 
It is often said to be executed, or made conclusive as between the 
parties, by being "signed, sealed, and delivered." At common law 
there seems to be some doubt whether signature to a deed is neces- 
sary,** but it is, to say the least, safer to sign. That,, however, 
which identifies a party to a deed with its execution is the presence 
of his seal ; that which makes it operative, so far as he is concerned, 
is the fact of its delivery by him." 

The Seal 
There cannot beji^deed or specialty without a seal." 
A seaTis said Sy Lord Cote: to be waxTwTEH an Impression,** and 

no doubt anciently wax was the only substance used ; but it is no 

It A deed is a writing: or Instrument, written on paper or parchment, sealed 
and deUvered, to prove and testify the agreement of the parties whose deed 
It is to the things .contained in the deed. * * * A deed cannot be written 
upon wood, leather, cloth, or the like, bat only apon parchment or paper, for 
the writing upon them can be least ritiated, altered, or corrupted.*' Shep. 
Touch. 50; Ck). Litt 85b. For the reason why a deed may not be written on 
wood, see PoL Cont 156w It may well be doubted whether the old rule re- 
quiring paper or parchment exclusively would be strictly followed to-day. 
See "Deeds;' Dec, Dig. {Key-No,) |§ 26, 28; Cent Diff. S| S0-6S. 

IS Leake, Cont 76; Cooch v. Goodman, 2 Q. B. 597; Cromwell ▼. Gruns- 
den, 2 Salk. 462 ; Jeffery v. Underwood* 1 Ark. 108. Bee "Deed^," Deo. Dig. 
{Key-Vo.) | k5; Cent, Dig. %% S9^J^ 

1* Anson, Cont (4th Ed.) 46. 

1* State r. Thompson, 49 Mo. 188; Vance v. Funk, 2 Scam. (111.) 263; Chil- 
ton ▼. People, 66 111. 501 ; Stabler ▼. Cowman, 7 Gill & J. (Md.) 2S4 ; Booth- 
bay T. Giles, 68 Me. 160; Corbin v. Laswell, 48 Mo. App. 626. Where, how- 
ever, a seal is omitted by mistake, a court of equity will reform the Instru- 

i» 3 Coke, Inst 169. 



64 CONTRACTS UNDER SEAL (Ch. 3 

longer essential. The impression may be made on a wafer attached 
to the instrument, or any other substance sufficiently tenacious to 
adhere, and capable of receiving an impression.^* It is therefore 
held sufficient if the impression is made on the paper itself on 
which the instrument is written. It need not be on a separate sub- 
stance attached to the instrument.*^ 

Some of the states have passed statutes allowing a scroll or scrawl 
made with the pen to be used in the place of a seal,** and some 
courts have held, independent of statute, that a scroll is sufficient** 
At common law, however, this is not permissible : there must bean 
impression. ** 

At common law the mere affixing of the seal makes the instru- 
ment a contract under seal, but it has been held that, where a scroll 
is used, th^re must be some recital in the body of the instrument 

ment by supplying one, or wUl restrain the setting ap of the want of one to 
defeat a recovery at law. Inhabitants of Bernards Tp. ▼. Stebblns, 109 U.- S. 
841, 3 Sup. Ct 252, 27 L. Ed. 956; Wadsworth v. WendeU, 5 Johns. Ch. (N. 
Y.) 224; Town of Rutland t. Page, 24 Vt 181; Inhabitants of Town of 
Montville v. Haughton, 7 Conn. 548; SulUvan t. Latimer, 38 S. O. 417, 17 
S. E. 221. The matter appearing on an Instrument must have been Intended 
as a seal. The fact that It appears to be a seal, If It was not so Intended, 
does not make the Instrument a specialty. Clement v. Gunhouse, 5 Esp. 83; 
Blackwell v. Hamilton, 47 Ala. 470. As to presumption that there was a seal 
on an ancient deed on which no seal appears, see Reusens v. Staples (C C.) 
512 Fed. 91. See "Deeds;* Dec, Dig. (Key-No.) f 46; Cent. Dig. if 99-10$. 

i«4 Kent, Comm. 452; Warren v. Lynch, 5 Johns. (N. Y.) 239; Tasker v. 
Baxtlett, 5 Cush. (Mass.) 359; Beardsley v. Knight, 4 VL 47L See "SeaU,'* 
Dec. Dig. {Key-No.) % S; Cent. Dig. If 4-6. 

IT Pillow V. Roberts, 13 How. 472, 14 L. Ed. 228 ; Pierce v. Indseth, 106 
U. S. 546, 1 Sup. Ct. 418, 27 L. Ed. 254; Hendee v. Pinkerton, 14 Allen 
(Mass.) 381. See "Seals,** Dee, Dig. {Key-No.) S S; Cent. Dig. If 4-6. 

18 Such Is the ease In California, Connecticut, Florida, Indiana, Illinois, 
Michigan, Minnesota, Missouri, New Jersey, New Mexico, Oregon, Virginia, 
West Virginia, and Wisconsin, and probably in other states. The word 
"seal," following the signature, has been held a sufiQclent compliance with 
such a statute, although not accompanied by any scrawl, stamp, impression, 
or mark. Jackson v. Security Mut Life Ins. Co., 233 IlL 161, 84 N. E. 198. 
See "Seals,** Dec. Dig. {Key^No.) S| S-5; Cent. Dig. §| S-7. 

!• HACKER^S APPEAL, 121 Pa. 192, 15 Atl. 500, 1 L. R. A. 861, Throck- 
morton, Cas. Contracts, 40; Lee v. Adkins, Minor (Ala.) 187; Bertrand ▼. 
Byrd, 4 Ark. 195; Hastings v. Vaughn, 5 Cal. 315; Trasher v. Bverhart, 8 
Gill & J. (Md.) 234 ; Underwood v. Dollins, 47 Mo. 259 ; Groner v. Smith, 49 
Mo. S18u Whether a mark or character shall be held to be a seal depends 
on the intention of the executant as shown by the paper. Jacksonville, M. P. 
Ry. & Nav. Co. v. Hooper, 160 U. S. 514, 16 Sup. Ct. 379. 40 L. Ed. 315 ; 
HACKER»S APPEAL, supra. See "Seals,** Deo. Dig, {Key-No.) ff 5-o; Cent. 
Dig. II S-7. 

20 Warren v. Lynch, supra; Hendee v. Pinkerton, supra; Bates v. Bostoc 
& N. Y. C. R. Co., 10 Allen (Mass.) 251 ; Perrine ▼. Cheeseman, 11 N. J. Law, 



8§ 30-32) HOW OONTBACTS tJKDBB SEAL ARB MADB 65 

recognizing it as a seal.*^ The authorities on this point are not in 
accord.*" 

One seal may do for any number of parties signing a deed if each 
one adopts it as his own, but it is always safer to have a seal for 
each signature.** 

Delivery 

To render an instrument under seal a valid and binding contract, 
it must be delivered.' * Delivery may be "effected either by actually 
handing the instrument to the other party himself,*^ or to a strati- 

174, 19 Am. Dec. 388. Bte "SeaUr Deo. Dig. (Keu-2fo,) U S^; Cent Dig. 

SI Cromwell ▼. Tate's Bx'r, 7 Leigh (Ya.) 801, 80 Am. Dec. 506 ; Lee ▼. Ad- 
kins, Minor (Ala.) 187; Glasscock t. Glasscock, 8 Mo. 677; Lewis' Ex'rs t. 
Orerby's Adm'rs, 28 Grat (Va.) 827; Breitling y. Marx, 123 Ala. 222, 26 
South. 206 ; Bchols y. PhUlips, 112 Ga. 700^ 87 S. B. 977. See "8eaU,'* Dec. 
Dig. (Ketf-No.) || 5-^; Cent. Dig. H 5-7. 

IS ''The authorities," says Prof. Knowlton in his edition of Anson on Con- ' 
tracts^ "are not in aceord upon this question; and, while much may depend 
on the wording of the statute allowing the scroll, stiU it is believed that, if 
the device adopted is intended to be a seai, it is to be regarded as such, though 
the intention be not expressly declared. The presumption is that the parties 
undertook to execute such an instrument as would be effectual for the pur- 
pose intended.** Knowlton's Anson, Cont 55. See Burton t. Leroy, 5 Sawy. 
610, Fed. Cas. No. 2,217 ; Trasher v. Everhart, 8 GiU ft J. (Md.) 234 ; Barnes 
T. Preston, 20 111. 889; Brown y. Jordhal, 82 Minn. 135, 19 N. W. 650, 50 Am 
Rep. 516; Wing t. Chase, 85 Me. 260; Richardson t. Mining Co., 22 Cal., at 
page 157; FrevaU ▼. Fitch, 5 Whart (Pa.) 825, 84 Am. Dec. 558; 21 Am. & 
Bug. Enc. Law, 804, note. See "Seals," Dee. Dig. {Key-No.) || 9^; Cent. Dig, 

" Ball V. DuDsterville, 4 Term R. 313; Ludlow t. Simond, 2 Caines, Cas. 1, 
S Am. Dec 291 ; Pickens v. Rymer, 90 N. C. 282, 47 Am. Rep. 521 ; Davis v. 
Burton, 3 Scam. (111.) 41, 36 Am. Dec. 511; Yale v., Flanders, 4 Wis. 96; Bur- 
nett V. McCluey, 78 Mo., at page 688; HoUis v. Pond, 7 Humph. (Tenn.) 222; 
In re Hess' Estate, 150 Pa. 846. 24 Atl. 676 ; NorveU v. Walker, 9 W. Va. 447 ; 
atizens' Building Ass'n v. Cummings, 45 Ohio St 664, 16 N. E. 841. And 
see Baltimore Pearl Hominy Co. v. Unthicum, 112 Md. 27, 75 Atl. 737, 136 
Am. St Rep. 883, 20 Ann. Cas. 1325, in which it was held that a contract 
signed by two parties, but having a seal opposite the signature of only one, 
was not a contract under seal of the other. Bee **Seal8,'* Deo. Dig. {Rey-No.) 
II S^; Cent. Dig. S§ S-7. 

«*Shep. Touch. 57; Cook v. Brown, 34 N. H. 476; Johnson v. Farley, 45 
N. H. 505; Overman v. Kerr, J.7 Iowa, 490; Fisher v. Hall, 41 N. Y. 421; Duer 
▼. James, 42 Md. 492; Younge v. GuUbeau, 3 Wall. 641, 18 L. Ed. 2C2; Harris 
V. Regester, 70 Md. 109, 16 Ati. 386. Obtaining deed by fraud, no delivery. 
Usher V. Beckwith, 30 Wis, 55, 11 Am. Rep. 546; Gould v. Wise, 97 Cal. 
632, 32 Pac. 576, 33 Pac. 328. See '*Deed#," Dee. Dig. (Key-No.) S 54; Cent. 
Dig. I 116. 

2B Richmond v. Morford, 4 Wash. 337, 30 Paa 241, 31 Pac 513; Bogie v. 
Bogie, 35 Wis. 659. See **Deed8," Deo. Dig, {Key-No.) | 56; Cent. Dig. K 
il7-iS5. 

Clabk Coitt.(3d Ed.) — 6 



66 CONTBACT8 UNDER SEAL (Ch. 8 

ger for his benefit,'* or by words or conduct indicating an intention 
that the instrument shall become binding though it is retained in 
the possession of the party executing it.'^ In all cases there must 
be an intention to deliver the instrument. Merely to part with Jhe 
possession of it, without intending thereby to render it operative, 
IS not a delivery .'* 

s«Peavey t. Tilton, 18 N, H. 151, 45 Am. Dec 865; MitcheU's Lessee t. 
Ryan, 8 Ohio St 377; Otis t. Spencer, 102 111. 622» 40 Am. Rep. 617; Douglas 
T. West, 140 111. 455, 81 N. E. 403 ; HaU ▼. Hall, 107 Mo. 101, 17 S. W. Sll ; 
WllUams ▼. Latham, 118 Mo. 165, 20 S. W. 99; Brown t. Brown, 66 Me. 816; 
Duer ▼. James, 42 Md. 492 ; Haenni y. Bleisch, 146 lU. 262, 34 N. B. 153 ; Col- 
yer y. Hyden, 94 Ky. 180, 21 S. W. 868 ; White y. Pollock, 117 Mo. 467, 22 & 
W. 1077, 88 Am. St Rep. 671. See '^Deeds,'' Dee. Dig. (Key-No.) ^ 66; Cent. 
Dig. II 111^125. 

srXenos y. Wickham, L. R. 2 H. L. 296; Roberts y. Security Co. [1897] 
1 Q. B. Ill; Ruckman y. Ruckman, 82 N. J. Eq. 259; Benneson y. Aiken, 
102 lU. 284, 40 Am. Rep. 592 ; Rodemeler y. Brown, 169 lU. 347, 48 N. E. 468, 
61 Am. St. Rep. 176; McCullough y. Day, 45 Mich. 554, 8 N. W. 535; Dunham 
y. Pitkin, 53 Mich. 504, 19 N. W. 166 ; Wall y. Wall, 30 Miss. 91, 64 Am. Dec. 
147. Recording of deed by grantor may be presumptiye evidence of delivery. 
Glaze y. Three Rivers, etc., Ins. Co., 87 Mich. 349, 49 N. W. 595; Steele v. 
Lowry, 4 Ohio, 72, 19 Am. Dec. 581 ; Kemp y. Walker, 16 Ohio, 118 ; Tobin y. 
Bass, 85 Mo. 654, 65 Am. Rep. 393; Burke y. Adams, 80 Mo. 604, 50 Am. 
Rep. 510; Swlney v. Swiney, 14 Lea (Tenn.) 816; Vaughan v. Godman, 108 
Ind. 499, 3 N. E. 257; Walton v. Burton, 107 111. 54; Moore v. Giles, 49 Conn. 
670; Palmer v. Palmer^ 62 Iowa, 204, 17 N. W. 463; Whitney v. Hale, 67 N. 
H. 385, 80 AtL 417 ; Holmes v. McDonald, 119 Mich. 663, 78 N. W. 647, 75 Am. 
St Rep. 430. The presumption may be rebutted, however, by showing that 
there was in fact no delivery and acceptance. Hendricks y. Rasson, 53 Mich. 
575, 19 N. W. 192 ; Jefferson County Bidg. Ass'n v. Hell, 81 Ky. 516 ; -Weber 
y. Christen, 121 111. 91, 11 N. E. 893, 2 Am. St Rep. 68; Brown v. Brown, 
167 111. 631, 47 N. E. 1046; Fair Haven Marble ft Marbleized Slate Co. y. 
Owens, 69 Yt 246, 37 Atl. 749. It is very generally held that the mere fact 
of recording raises no presumption of delivery. Gifford v. Corrigan, 105 N. Y. 
223, 11 N. E. 498; Hill v. McNichol, 80 Me. 209, 13 AU. 883; Barnes v. Barnes, 
161 Mass. 381, 37 N. E. 749 ; Babbitt v. Bennett, 68 Minn. 260, 71 N. W. 22. 
See **Deed8;' Deo. Dig. (Key-No.) | 56; Cent. Dig. || il7-i«5. 

2« Jordan v. Davis, 108 111. 336; Adams v. Ryan, 61 Iowa, 733, 17 N. W. 159; 
Ireland v. Geraghty (C. C.) 15 Fed. 45. "A delivery may be by acts without 
wordsf or by words without acts, or by both. Anything which clearly mani- 
fests the intention of the grantor, and the person to whom it is delivered, 
that the deed shall presently become operative and effectual ; that the gran- 
tor loses all control over it; and that by it the grantee is to become possessed 
of the estate,^onstitute8 a sufficient delivery. The very essence of the de- 
livery is the Intention of the party." Marshall D. Ewell, in note to Ireland 
V. Geraghty, supra. And see Bryan v. Wash, 2 Gilman (111.) 565; Walker 
V. Walker, 42 lU. 811, 89 Am. Dea 445; Duer v. James, 42 Md. 492; Ruck- 
man V. Ruckman, 32 N. J. Eq. 259 ; Thatcher v. St Andrew*s Church, 37 Mich. 
204; Gregory v. Walker, 38 Ala. 26; Burkholder v. Casad, 47 Ind. 418; Rogers 
V. Carey, 47 Mo. 235, 4 Am. Rep. 322; Williams v. Schatz, 42 Ohio St 47; 
Goodlet y. Kelly, 74 Ala. 213; Davis v. WiUiams, 67 Miss. 843; Burnett v. 



§§ 30-32) HOW CONTRACTS UNDBB SEAL ARB HADB 67 

To constitute a good delivery, it is generally held in this coun- 
try that there must also be an acceptance by the other party,** but 
the acceptance need not always be expressly shown. Where the 
instrument is clearly beneficial to the other party, its acceptance 
will be presumed,** though, of course, this cannot be so, even when 
it is beneficial, if acceptance is in fact refused, for a man cannot be 
compelled to accept even a benefit.** 

Possession by the grantee or obligee is prima f^cie evidence of 
d elivery and accept ance." 

As tne delivery of a contract under seal is what makes it opera- 
tive, its date is the date of delivery. The date appearing on tlie in- 
strument is entirely immaterial. It may have no date at all, or an 
impossible date.** In the absence of anything to show the con- 
trary, a deed will be presumed to have been delivered on the day 
of its date, but delivery at a different time may always be shown by 
extrinsic evidence.** 

Same — Escrow 

A deed may be delivered to a stranger, to be by him delivered to 
the other party to it on the fulfillment of certain conditions, in 

Bamett, 40 Mich. 361. Where a deed Is placed in the hands of a depositary 
to be delivered to the grantee upon the death of the grantor, or at any other 
time, but the grantor reserves the right and power to secall It at any time, 
there la no delivery. Cook v. Brown, supra ; Stinson ▼. Anderson, 96 IlL 373 ; 
Prutsman v. Baker, 30 Wis. 644, 11 Am. Rep. 592; Baker v. Haskell, 47 N. 
H. 479, 93 Am. Dec. 455; Brown t. Brown, 66 Me. 316; Duer v. James, 42 
Md. 492. Bee ''Deeds:* Dec, Dig. (Key-No.) S 56; Cent. Dig, §| 117-1B5. 

s* Moore V. Flynn, 135 111. 74, 25 N. E. 844; Mitchell's Lessee v. Ryan, 3 
Ohio St 377; Gorbett v. Norcross, 35 N. H. 99; Leppoc v. Bank, 32 Md. 136; 
Comer v. Baldwin, 16 Minn. 172 (Gil. 151) ; Meigs v. Dexter, 172 Mass. 217, 
52 N. B. 75. Third parties may acquire rights by attachment or otherwise 
at any time before acceptance. Bell v. Bank, 11 Bush (Ky.) 34, 21 Am. Rep. 
205; Parmelee v. Simpson, 5 WalL 81, 18 U Ed. 542; Day y. Griffith, 15 
Iowa, 104. See '^Deeda," Deo. Dig. (Key-No.) f 64; Cent. Dig. Si 142-US. 

topeavey ▼. TUton, 18 N. H. 151, 45 Am. Dec. 365; Mltcheirs Lessee v. 
Ryan, 3 Ohio St 377; HaUuck v. Bush, 2 Root (Ck>niL) 26^ 1 Am. Dec. 60; 
WaU V. Wall, 30 Miss. 91, 64 Am. Dec. 147; Whitney v. Hale, 67 N. H. 385, 
30 AtL 417. See ''Deeds,*' Dec. Dig. (Key-No.) ^ 194; Cent. Dig. f 579. 

SI See Leake, Ck>nt 81; Butler and Baker's Case, 8 Coke, 26b; St Louis, 
I. M. ft S. Ry. Co. V. Ruddell, 53 Ark. 32, 13 S. W. 418; Atwood v. Marshall, 
52 Neb. 173, 71 N. W. 10O4. And see cases cited supra, note 27. See ''Deeds," 
Dee. Dig. (Key-No.) 1 194; Cent. Dig. | 519. 

ss Keedy v. Moats, IZ Md. 825, 19 Atl. 965; Dawson v. Hall, 2 Mich. 390; 
Wood V. Chetwood, 44 N. J. Eq. 64, 14 Atl. 21. See "Deeds;* Deo. Dig. {Key- 
No.) i 208; Cent. Dig. || 625^32. 

»• McMichael ▼. Carlyle, 53 Wis. 504, 10 N. W. 556. See "Deeds,** Deo. Dig. 
(Key-No.) U ^. i08; Cent. Dig. |i 145-148, 294-808. 

•4 Faulkner v. Adams, 126 Ind. 459, 26 N. E. 170; Saunders v. Blythe, 112 



68 C0NTBACT8 UNDER SEAL (Ch. 8 

which case it does not take effect until the condition is fulfilled.** 
This is a delivery in escrow, and during this period the deed is 
termed an "escrow." Immediately upon fulfillment of the condi- 
tions, the deed becomes operative, without actual delivery by the 
depositary.** To constitute an escrow, the delivery to the deposi-. 
tary must be conditional. If it is merely postponed, the delivery to 
him is an effective delivery to the grantee or obligee, and not a de- 
livery in escrow.*^ A deed thus conditionally delivered must be 
delivered to a stranger. If it is delivered to the other party, or to 
his agent, it will take effect at once, in spite of the conditions, on 
the ground that a delivery in fact outweighs verbal conditions.** 

There is no delivery, even as an escrow, where the grantor or 
obligor retains control of the deed with power to withdraw it.** 

Upon delivery of an escrow, and performance or happening of the 
condition, the deed becomes effective from the date of the original 

Mo. 1, 20 S. W. 819; Smith y. Porter, 10 Gray (Mass.) 66; Battlet t. Fobes, 
21 Pick. (Mass.) 239. 8e0 **Deed8," Deo. Dig. (Key-No.) ^ IH; Cent. Dig. S 578, 

•» Harkreader ▼. Clayton, 66 Miss. 3S3, 31 Am. Rei». 369; Wheelwright t. 
Wheelwright, 2 Mass. 447, 8 Am. Dec. 66; Pmtsman t. Baker, 80 Wis. 644, 
11 Am. Rep. 592. Bee "Deed*," Dec. Dig. (Key-No.) SS 59^1; Cent. Dig. H 
Ise-Ul; '^Escrows,** Deo. Dig. (Key-No.) | i; Cent. Dig. IS 1-5. 

>« P^nitsman t. Baker, supra ; Couch t. Meeker, 2 Conn. 802, 7 Am. Dec. 
274; White Star Line Idteamboat Co. t. Morague, 91 Ala. 610, 8 South. 867. 
See ** Deeds," Deo. Dig. (Key-No.) H 69-61; Cent. Dig. if 196-141; **S9oraws,*' 
Dec. Dig. (Key-No.) t It; Cent. Dig. K i^. 19- 

tT Martin t. Flaharty, 18 Mont 96^ 82 Pac. 287, 19 L. B. A. 242, 40 Am. 
St Rep. 416. Bee **Deeds,*'*Deo. Dig. (Key-No.) i| 59-61; Cent. Dig. H 136- 
1^1; ^'Escrows,*' Dec. Dig. (Key-No.) | 6; Cent. Dig. ( 8. 

«>Co. Litt 36a; Dawson t. Hall, 2 Mich. 390; Fairbanks t. Metcalf, 8 
Ma«B. 230; Foley t. CoWgiU, 6 Blackf. (Ind.) 18, 32 Am. Dec 49; Stev^ison 
Y. Crapnell, 114 lU. 19, 28 N. B. 379 ; Miller t. Fletcher, 27 Grat (Va.) 403, 21 
Am. Rep. 356; Braman ▼. Bingham, 26 N. Y. 483; Cocks t. Barker, 49 N. X. 
110; Graves t. Tucker, 10 Smedes & M. (Aliss.) 9; Ordinary of State ▼. 
Thatcher, 41 N. J. Law, 408, 82 Am. Rep. 225; Gibson t. Partee, 19 N. C. 
530; Williams v. Higgins, 69 Ala. 617; Richmond v. Morford, 4 Wash. 337, 
30 Pac 241, 31 Pac. 513; Hubbard t. Greeley, 84 Mc 840, 24 Atl. 799, 17 
L. R. A. 511 ; Campbell v. Jones, 52 Ark. 493, 12 S. W. 1016^ 6 L. B. A. 783 ; 
Dixon y. Bank, 102 'Oa. 461, 31 S. B. 96, 66 Am. St Rep. 193. 

In New York it has recently been held that the rule does not apply when 
t^e instrument does not relate to real estate, at least where it does not re- 
quire a seal for its validity. Blewitt v. Boorum, 142 N. Y. 357, 37 N. E. 119, 
40 Am. St Rep. 600. Qutere, whether the rule still prevails in England. 
Anson, Cont (8th Ed.) 53 ; Hudsoi^ v. Revett, 6 Ring. 308, 387. Bee ''Deeds,*' 
Dec. Dig. (Key-No.) U 59-61; Cent, Dig. U 156-141; ^'Escrows;' Dec Dig. 
(Key-No.) S 4; Cent. Dig. f 7. 

BBPrutsman y. Baker, supra; Campbell y. Thomas, 42 Wis. 437, 24 Am. 
Rep. 427 ; Brown y. Brown, 66 Me. 316. Bee ''Deeds," Dec Dig, (Key-No,) H 
59-^1; Cent. Dig. U 156-141; "Escrows," Deo. Dig. (Key-No.) S 4; Cent, 
Dig. i 7. 



S 33) 0HARA0TBRI8TICS OF GONTBAOT UNDBB S1BAL M 

delivery; so that, if a bond is delivered as an escrow, and before 
fulfillment of the condition the obligor and obligee die, yet, on ful- 
fillment of the condition, it becomes an effective bond, and charges 
the assets of the deceased obligor/* 

Execution in Blank 

A deed executed in blank — that is, completely sealed and deliv- 
ered, with an omission of a naaterial particular — is void, and cannot 
be made good by subsequently filling in the blank without a re- 
execution, or what is equivalent thereto.** 

Deed Poll and Indenture 

Formerly there was a distinction between a deed poll and an in- 
denture. A deeil poll was a deed made by one party, and having a 
polled or smooth-cut edge. Where a deed was made by two or 
more parties, and contained mutual covenants, it was copied for 
each on the same parchment, and the copies cut apart with indented 
edges, so as to enable them to be identified by fitting the parts to- 
gether. Such deeds were called indentures. The distinction, even 
where it has not been abolished by statute, is no longer of any prac- 
tical importance; but the terms are still used — ^the term "deed poll" 
to signify a deed made by one party only, and the term "indenture," 
a deed made between two or more parties, all of whom execute it. 

CHARACTERISTICS OF CONTRACT UNDER' SEAL 

33. The chief characteristics of a deed or contract imder seal are 
that: 

(a) The recitals are conclusive against the parties. They are 

said to be estopped thereby. 

(b) It merges a prior simple contract. 

(c) A right of action is not barred until the lapse of a longer 

time than in case of simple contracts. 

(d) No consideration is necessary. 

EXCEPTIONS— CI) Contracts in partial restraint of trade, 
though under seal, require consideration. 

«• Leake, Cont 79. 

*i Leake, Ctont 79 ; Powell ▼. Duff, 3 Camp. 181 ; Weeks t. Mamardet, 14 
Bast, '568. Blank for sum of money afterw^ards filled in. Hudson y. Revett, 
6 Bing. 368. Since authority to execute a deed must be conferred by instru- 
ment under seal, in strictness authority to fill a blank in a deed otherwise 
executed cannot be conferred by parol. Many courts, however, to-day recog- 
nize the Talldity of a deed in which blanks have been so filled by an agent 
authorized by parol. See Tiff. Ag. 2&. See '*Deeds," Dec. Dig, (Key-No.) i 
S2; Cent. Dig. | 64. 



CONTRACTS UNDER SEAL (Ch. 3 

(2) Where there was a consideration, it may be shown to 
have been illegal or immoral. 

(3) Courts of equity Will not specifically enforce a deed 
without consideration. 

(4) By statute in some states the distinction between sealed 
and unsealed instruments is abolished, while in others 
a seal is merely declared presumptive, but rebuttable, 

^ evidence of a consideration. 

Estoppel by Deed 

Statements made in a simple contract, though strong evidence 
against the parties thereto, are not absolutely conclusive against 
them, and may be contradicted. Statements made in a deed, how- 
ever, are absolutely conclusive against the parties to the deed or 
their privies in any legal proceedings between them taken upon 
the deed.** "The principle is that, where a man has entered into a 
solemn engagement by and under his hand and seal as to certain 
facts, he shall not be permitted to deny any matter he has so as- 
serted." *• Such a prohibition to deny facts is termed an -"estoppel 
by deed." The statements, however, must not be of immaterial 
matters, or matters by way of general recital, and the deed must be 
valid.** A recital of the amount or receipt of the consideration 
does not preclude evidence of the actual consideration or a recovery 
of the amount due ; *• but in the absence of mistake, fraud, or il- 

41 WATKINS T. ROBERTSON, 105 Va. 269, 54 S. E. 83, 5 L. R. A. (N. S.) 

1194, 115 Am. St Rep. 880, Throckmorton Cas. Contracts, 43 ; Carver v. Jack- 
son, 4 Pet 1, at page 83, 7 L. Ed. 761; Jackson v. Parkhurst, 9 Wend. (N. Y.) 
209; Smith v. Bumham, 9 Johns. (N. Y.) 306; Cutler v. Dickinson, 8 Pick. 
(Mass.) 386; Dobbins v. Cruger, 108 lU. 188; City of Ottawa v. Bank, 105 
U. S. 342, 26 L. Ed. 1127 ; Gerry v. Sttmson, 60 Me. 186 ; Thompson t. Smith, 
96 Mich. 258, o5 N. W. 886; Carson v. Cochran, 52 Minn. 67, 53 N. W. 1130; 
Moore v. Earl, 91 Cal. 032, 27 Pac. 1087; Chapman v. Perslnger's Ex'x. 87 
Va. 581, 13 S. B. 549 ; BUUngsley v. Harris, 79 Wis. 103, 48 N. W. 108 ; Met- 
ropolitan Ins. Co. V. Bender, 124 N. Y. 47, 26 N. B. 345, 11 L. R. A. 708; 
Rogers v. Bollinger, 69 Ark. 12, 26 S. W. 12; Balue t. Taylor, 136 Ind. 368, 
36 N. E. 269 ; Johnston v. Oliver, 51 Ohio St 6, 36 N. B. 458 ; Willis v. Terry 
(Ky.) 24 S. W. 621. See "Contracts'* Dec. Dig. {Key-No.) i 82; Cent Dig, 
|§ 225-280; **E8toppeW* Dec. Dig. (Key-No.) | U; Cent. Dig. §| 18-B3. 

*» Bowman v. Taylor, 2 Adol. & E. 278. Bee ** Contracts,*' Dec. Dig. (Key- 
No.) I 8«; Cent. Dig. §S 225-230; "Estoppel,** Deo. Dig. (Key-No.) % U; 
Cent. Dig. |S 18-25. 

** Wallace's Lessee t. Miner, 6 Ohio, 367 ; Zlmmler t. Water Co., 67 CaL 
221. See "Contracts,** Dec. Dig. (Key-No.) S 82; Cent. Dig. §| 225-2S0; "Es- 
toppel,** Dec. Dig. (Key-No.) S U; Cent. Dig. i§ 18-25. 

40 Wilkinson v. Scott, 17 Mass. 249; Irvine v. McKeon, 23 CaL 472; Wit- 
beck y. Walne, 16 N. Y. 532 ; White v. Miller, 22 Vt 380 ; Thayer v. Viles, 
23 Vt 494; McCrea v. Purmort, 16 Wend. (N. Y.) 460, 80 Am. Dea 103; 



§ 33) OHABACTEBISnGS OF CONTBACT UNDER SEAL 71 

» 

legality,** such recital may not be contradicted for the purpose of 
avoiding the instrument.*^ 

Recitals in a deed are, of course, conclusive only against the 
parties thereto and their privies, or those claiming under or through 
them. They do not work an estoppel as between strangers, nor as 
between a stranger and a party to the deed.** 
Merger 

Where, after making a simple contract, the parties enter into an 
identical engagement under seal, the simple contract is merged in 
the deed, and becomes extinct; one cannot have, in respect of the 
same demand, a coexisting remedy, by proceeding both on cove- 
nant and on simple contract.** This extinction is called "merger.'* 
The contracts, however, must be the same — that is, the subject- 
matter must t^e identical — and they must be between the same 
parties.** 

LinUtation of Actions 

A right of action arising out of a simple contract is barred by the 
lapse of a shorter period of time than a right of action arising out 
of a contract under seal. The respective periods vary somewhat 
under the statutes of the different states^ but generally an action 

Pritchard r. Brown, 4 N. H. 397, 17 Am. Dec. 431 ; Smith v. Arthur, 110 N. 
C. 400, 15 S. E. 107; Union Mut Ins. Co. v. Klrchoff, 133 IlL 368, 27 N. B. 
91. See ''Evidence/* Dec, Dig. (Kej/'No.) ( 419; Cent. Dig. (S 1912-1928; 
**CofUract8,'' Cent. Dig. (( 229, 408. 

«• See post, p. 168. 

4T WATKINS T. ROBERTSON, 105 Va. 2G9, 54 S. B. 33, 6 L. R. A. (N. S.) 
1194, 115 Am. St Rep. 880, Throckmorton Cas. Contracts, 43. Bee "Evi- 
dence,'' Dec. Dig. {Key-Vo.) \ 419; Cent. Dig. §{ 1912-1928. 

«s Thomason ▼. City of Dayton, 40 Ohio St 63 ; Allen ▼. Allen, 45 Pa. at 
page 473 ; Brittaln v. Daniels, 94 N. C. 781 ; Reeves y. Brayton, 36 S. C. 384, 
15 S. £. 65a See "EdtoppeW Dec. Dig. (Kei/'No.) { 26; Cent. Dig. §{ 61, 62. 

«• Price ▼. Moulton, 10 C. B. 561 ; Banorgee t. Hovey, 6 Mass. 11, 4 Am. 
Dec. 17 ; Leonard v. Hughlett, 41 Md. 380 ; Curson ▼. Monteiro, 2 Johns. (N. 
Y.) 308; Rhoads t. Jones, 92 Ind. 328; Robbins t. Ayres, 10 Mo. 538, 47 Am. 
Dee. 125 ; McNanghten v. Partridge, 11 Ohio, 223, 28 Am. Dec. 731 ; Bumes 
▼. AUen, 31 N. C. 370; Berry y. Bacon, 28 Miss. 318; Griswold v. Eastman, 
61 Minn. 189, 53 N. W. 542 ; Shenandoah VaUey R. Co. y. Dunlop, 86 Va. d46» 
10 S. E. 239. But see Shelby y. RaUroad Co., 143 111. 385, 82 N. E. 438 ; Sa- 
yllle y. Chalmers, 76 Iowa, 325, 41 N. W. 30; post, p. 599.. See "Contracts," 
Dec. Dig. (Key-No.) i 245; Cent. Dig. U 1129, 1190. 

BOHutchins y. Hebbard, 34 N. Y. 24; Day y. Leal, 14 Johns. (N. Y.) 404 
If the contract under seal is expressly received as collateral security for per- 
formance of the simple contract, or if it merely recognizes the debt, and fixes 
the mode of ascertaining its amount, there is no merger. Marryat y. Marry- 
at 28 Beay. 224; Van Yleit y. Jones, 20 N. J. Law, 340, 43 Am. Dec 633; 
Rees y. Logsdon, 68 Md. 93, 11 Atl. 70S ; Brengle y. Bushey, 40 Md. at page 
147, 17 Am. Rep. 586 ; Charles y. Scott, 1 Serg. & R. (Pa.) 294 ; post, p^ 599 
Bee **Contract8," Deo. Dig. (Key-No.) ( 245; Cent. Dig. {$ 1129, 1150. 



72 , CONTRACTS UNDER SEAL (Ch. 8 

on a simple contract is barred in six years or less, while an action 
on a sealed instrument is not barred if brought within ten, or, in 
some jurisdictions, twenty, years. 

Gratuitous Promises 

At common law, a gratuitous promise, or prcfmise for which the 
promisor obtains no consideration, is binding if made under seal,'^ 
but is absolutely void in the absence of a seal. This characteristic 
of contracts under seal is often accounted for on the ground that 
their solemnity imports a consideration, but the supposition is his- 
torically untrue. . At common law, even if it were allowable to 
show that there is no consideration for a deed, and if the obligee 
or grantee were to admit that there was no consideration, it could 
not affect the validity of the deed. It derives its validity solely 
from its form. The doctrine of consideration is of a much later 
date than that at which a contract under seal was in full efficacy, 
an efficacy which it owed entirely to its form.'* 

Same — ^Exceptions at Common Law 

Even at common law a contract in partial restraint of trade, 
tlK>ugh made under the formality of a seal, must be supported by 
a consideration.** 

And as a general rule, if there be a consideration for a deed, it is 
open to the party sued on the contract to show that the considera- 
tion was illegal or immoral, in which case the deed is void.'* 

Sam^ — Exceptions in Equity 

The idea of consideration as a necessary element of contract has 
always met with peculiar favor in courts of chancery. Equity will 

812 Bl. Comm. 446; Cooch ▼. Goodman, 2 Q. B. 580; Fallowes v. Taylor, 7 
Term R. 475; McMUlan v. Ames, S3 Minn. 257, 22 N. W. 612; Dorr v. Mun- 
sell, 13 Johns. (N. Y.) 430; Van Valkeuburgh v. Smith, 60 Me. 07; Harris v. 
Harris' Ex'r, 23 Grat (Va.) 737 ; Wing ▼. Peck, 54 Vt. 245 ; Page ▼. Truf ant, 
2 Mass. 159, 8 Am. Dec. 41 ; State t. Gott, 44 Md. 341 ; Bdelin ▼. Sanders, 
8 Md. 118; Day v. Davis, 64 Miss. 253, 8 South. 203. Bee ^'Contracts," Dec, 
Diff. (Key-No.) §S 47, ^8; Cent. Dig. §{ «20, 2«1, 256-258, 406. 

fti Anson, Cont (4th Ed.) 49. 

•« Mallan ▼. May, 11 Mees. & W. 665; Palmer ▼. Stebbins, 8 Pick. (Mass.) 
188, 15 Am. Dec. 204; Wiley v. Baumgardner, 97 Ind. 68, 49 Am . Rep. 427; 
Keeler ▼. Taylor, 63 Pa. 467, 91 Am. Dec. 221. Of course this does not apply 
to contracts that are to such an extent In restraint of trade as to be con- 
trary to public policy. Such contracts are void, as being illegal, without re- 
gard to the question of consideration. Alger v. Thacher, 19 Pick. (Mass.) 51, 
81 Am. Dec. 119. See post, p. 884. See *'CofUract9,^* Deo. Dig. {Key-No.) §{ 
^7, 48, 116; Cent. Dig. §§ 220, 221, m* S42. 

ft « Collins V. Blantem, 1 Smith, Lead. (^as. 369; Logan v. Plummer, 70 N. 
G. 388. And see Paxton v. Popham, 9 East, 421. See **Contract»,*^ Deo. Dig. 
{Key-No.) i ISO; Cent. Dig. {§ 6S1-100. \ 



i 33) 0HABACTBRI8TIC8 OF GONTBACT UNDBB 8BAL 78 

not grant its peculiar remedy of specific performance, nor exercise 
its peculiar power to correct mistakes and reform contracts, where 
the promises are without consideration, even though they are un- 
der seal.** So, also, in the exercise of its peculiar power of declar- 
ing a contract void and setting it aside on the ground of fraud and 
undue influence, it will look into the question of consideration, and 
absence of consideration will be regarded as corroborative evidence 
of fraud and undue influence.** 

Even a court of equity, however, will not relieve a person from 
his obligation under a sealed contract, simply for want or failure 
of consideration.*^ 

Same — Statutory Changes in the Law 

In some of the states the common-law rules in relation to sealed 
instruments have been either altogether abolished or greatly modi- 
fied by statute. In some states it is declared that any written in- 
strument, whether under seal or not, is presumptive evidence of a 
consideration, and all distinctions between sealed and unsealed in- 
struments are expressly abolished, and in these states want or 
failure of consideration may always be shown, even though the in- 
strument is sealed.** 

In other states the distinction between sealed and unsealed in- 
struments is not altogether abolished; but it is declared that the 
seal shall only be presumptive evidence of a sufficient considera- 

fts Smith ▼. Wood, 12 Wis. 425; Bayler y. Com., 40 Pa. 87, 80 Am. Dec. 
551; Black y. Ck)rd, 2 Har. A G. (Md.) 100; K^ffer y. Grayson, 76 Ya. 617, 
44 Am. Bep. 171 ; Snyder y. Jones, 88 Md. 542 ; Anon., 12 Mod. 603. But see 
infra, note 57. See "Specific Performance^" Dec, Dig. {Key-No,) SS i9, 50; 
CeiU. Diff. U lhO-152. 

se Hazard y. Irwin, 18 Pick. (Mass.) 95 ; Gondy y. Gebhart, 1 Ohio St 262 ; 
Mortland y. Mortland, 151 Pa. 593, 25 Atl. 150. See "Cancellation of Inetru- 
ments,** Deo. Dig. {Key-No.) S§ 4, S; Cent. Dig. (( i-^. 

»T Doughty y. MiUer, 50 N. J. Eq. 529, 25 Atl. 153. And see WATKINS y. 
ROBEBTSON, 105 Ya. 269, 64 8. B. 83, 5 L. R. A. (N. S.) 1194, 115 Am. St 
Rep. 880, Throckmorton Gas. Contracts, 43, where it is said, x)er Card well, J.: 
'There is much conflict among the autitiorities as to whether courts of equity 
will decree specific performance of an executory contract or coyenant because 
It is under seal, where it is not also supported by an actual yaluable consid- 
eration, and many of them take thenegatiy^ yiew; but, undoubtedly, this is 
to be ascribed to the fact that the ancient rule of the common law, that a 
seal conclusively imports a consideration, has been repealed or modified by 
statute in most of the states, and text-writers in citing cases fail in many 
Instances to make allowance for this fact*' See "Cancellation of Instnt^ 
menu;* Deo. Dig. {Key-yo.) { S; Cent. Dig. U i-5; "Deeded Cent. Dig. ( 
tJ0. 

•s There are such statutes as this In California, Kentucky, Indiana, Iowa, 
Kansas, Nebraska, Washington, and probably in other states. See **Seal$,^ 
Dec. Dig. {Key-No.) §S i, 2; Cent. Dig. U i, t. 



74 CONTRACTS UNDBB SEAL (Ch. 3 

tion, which may be rebutted in the same manner and to the same 
extent as if the instrument were not sealed.** The New Jersey 
court, in an action on a sealed note presented by a father to his 
daughter as a gift, held that such a statute as this did not abolish 
all distinctions between simple contracts and specialties, but mere- 
ly established new rules of evidence, for the purpose of allowing 
parties to an instrument under seal to show that there was no con- 
sideration, where, they intended that there should be a considera- 
tion ; and that it did not make it impossible for parties intentional- 
ly to enter into binding gratuitous promises.** 



NECESSITY FOR CONTRACT UNDER SEAL 

34. A contract under seal is necessary at common law— 

(a) Where the promise is withou t consideration . 

(b) Formerly, corporations pould only contract under seal; with 

some few exceptions; but with us they can make con- 
tracts which they have the power to enter into in the same 
manner as a natural person, unless restricted by charter. 

(c) Conveyances of land are in most jurisdictions required to be 

under seaL 

It is usually a matter of choice with persons whether they Will 
contract by word of mouth or simply in writing, or in writing un- 
der seal ; but in some cases, either at common law or by statute, it 
is necessary to employ the form of a deed. 

At Common Law — Gwatuitous Promises — Contracts with Corpora- 
tions 

There are two cases in which the old common law required that 
a contract should be made under seal, namely: (1) Where the 
contract was not founded on a consideration; and (2) where it 
was made by a corporation. 

A gratuitous promise, or contract for which there is no consider- 
ation, must be made by deed ; otherwise it will be void. This has 
already been shown to furnish a distinguishing characteristic be- 
tween contracts under seal and simple contracts. It is unneces- 
sary to say more on the subject. 

Under Uie old common law the rule was that, with a few, excep- 
tions, a corporation could only contract under the corporate seal, 

•• New York and New Jersey. 

•0 Aller y. Aller, 40 N. J. Law, 446. See ^'Coniractd,*' Deo. Di§. {Key-Nod 
i 48; Cent Dig, ( 406. 



I 34) NECESSITY FOB CONTBAOT UNDEB SEAL 75 

but this rule has long been repudiated in this country, and now a 
corporation, unless restricted by its charter or by statute, may con- 
tract in the same manner as a natural person. Thh will be more 
fully explained in ^another connection.** 

Conveyances of Land 

At common law, a conveyance of land was not required to be 6y 
deed, but in most jurisdictions this is necessary. It is not neces- 
sary to go into the question, as it belongs more properly to the 
subject of real property. Sometimes a seal is made necessary- by 
statute in the case of particular contracts. 

•i Post, p. 24L 




^^M^/";^' 



76 BTATura of frauds (Ch- ^ 



CHAPTER IV 

CONTRACTS REQUIRED TO BE IN WRITING— STATUTE OF FRAUDS 

35-^6. In General of Requirement of Writing. 

37. Statute of Frauds— In GeneraL 
88. Contracts within Section 4. 

39. Promise by Executor or Administrator. 

40. Promise to Answer for Debt, Default, or Miscarriage of An 

othet. 

41. Agreement in Consideration of Marriage. 

42. Contract or Sale of Lands. 

43L Agreement not to be Performed within Ooa Year. . 

44-49. Form Required. ' 

50-61. Effect of Noncompliance. 
52-^55. Contracts within Section 17. 

66. Acceptance and Receipt. 

57-^ Earnest and Part Payment. 

69. Form Required. 

00. Effect of Noncompliance. 



IN GENERAL OF REQUIREMENT OF WRITING 

35. At common law, bills of exchange and promissory notes must 
be in writing. 

36. By statute, writing is in some states declared necessary for the 
following contracts: 

• -^(a) Acceptance of a bill of exchange or other order for the pay- 
ment of money. 
(b) Acknowledgment of a debt barred by the statute of limita- 
' tions. 

/ (c) New promise by infant after attaining his majority, 
(d) By the statute of frauds writing is necessary in certain spec- 
"^ ified contracts. 

In the preceding chapter we have dealt with those contracts 
which acquire validity by reason of their form alone, and we now 
pass to simple or parol contracts, which depend for their validity 
upon the presence of consideration. As we have seen, however, 
there are some simple contracts which, while not in the solemn form 
of a deed or record, are required by law to be in writing, and which, 
therefore, depend not only on the presence of consideration, as in 
the case of other simple or parol contracts, but also on their form. 
These contracts, in so far as their form is concerned, we shall deal 
with in the present chapter. 



V 



r 



18 85-86) IN onrsBAL of bequibbmbnt of wbitino 77 

Independently of any requirement of law as to form, an agree- 
ment which might be made orally may require writing, because of 
the intention of the parties not to be bound until their agreement 
is reduced to writing. We have considered the question in treating 
of offer and acceptance.^ 

Common Law 

The only requirement of form for simple contracts which can b e 
s aid to exist independently yf statute is i n the case of negj^otiabl e 
'iills Ql ^|i[rhangr#> anH prnm^'^ct<}|^r Y notes. A till of exchange is a 
kind of contract which originated in the custom of merchants, and 
which is designed to take the place of money, to some extent, as a 
circulating medium ; and from its yery nature and use as a nego- 
tiable instrument it must be in writing. The same may be said of 
promissory notes, which, whether by statute or the law merchant, 
are negotiable, and stand on the same footing as bills of exchange. 
Besides the mere necessity of writing, these instruments are re- 
quired by law to be in a particular form, but this is matter more 
properly for a work on negotiable instruments. 

Statutory Requirements of Form 

The statutory requirements of form in simple contracts are main- 
ly to be found in the statute of frauds, but before going into these 
we must notice some others which are not so general. 

At common law, a bill of exchange or other order for the pay- 
ment of money might be accepted orally,* but now by statute in 
England,* and in most of the states in this country,^ the acceptance 
is required to be in writing. 

At common law, a contract of insurance need not necessarily be 
evidenced by a written policy.* In some of the states, however, 
statutes have been enacted prescribing particular forms for such 
contracts.* 

1 Ante, pp. 86, 52. a Norton, B. A N. (Sd Ed.) 91, 09. 

• BUls of Exchange Act, ( 17. 

« Uniform Negotiable Instruments Law, ( 132 (220), now adopted in more 
tban forty states. 

• ReUef Fire Ins. Co. y. Shaw, 94 U. S. 574^ 24 L. Ed. 291 ; Sanborn ▼. In- 
surance Co., 16 Gray (Mass.) 448, 77 Am. Dec 419; First Baptist Church y. 
Insurance Co., 19 N. Y. SCXS ; ElUs v. Insurance Co., 60 N. Y. 402, 10 Am. Rep. 
495; Nebraska ft I. Ins. Co. ▼. Seivers, 27 Neb. 541, 43 N. W. 351 ; ZeU v. In- 
surance Co., 75 Wis. 521, 44 N; W. 828; Wooddy y. Insurance Co., 31 Grat 
(Vs.) 862, 31 Am. Rep. 732 ; Putnam y. Insurance Co., 123 Mass. 324, 25 Am. 
Rep. 98; Hardwick y. Insurance Co., 20 Or. 547, 26 Pac. 840; Stickley y. Mo- 
bile Ins. Co., 87 S. C. 56, 16 S. B. 280, 888; Howard Ins. Co. y. Owen's Adm'r, 
M Ky. 197, 21 S. W. 1037. 89e "/fMnrsfice," Dee. Dig. (Key-No.) ( ISl; Cent. 
Dig. H tOS-BOO. 

• See Vance on Insurance, p. 29. 



78 . 8TATUTB or FRAUDS (Ch. 4 

In some of the states an acknowledgment of a debt barred by the 
statute of limitations is required to be in writing, and signed by the 
debtor, in order to take the debt out of the statute.^ 

In some states, a promise by a person, after becoming of age, to 
pay a debt contracted during his infancy, is required by statute to 
be in writing.* 

By act of congress assignments of patents and copyrights are re- 
quired to be in writing.* 

In most, if not in all, the states there are statutes regelating the 
mode of conveying land, and requiring writing, together with other 
formalities. Ip some states a deed is required. This, however, is 
a matter more properly for a work on real property,** 



STATUTE OF FRAUDS 

The famou s slatutft ni frauds jmd fierjnrie^ 29 Can XL r. 3, was 
ena cted in Engl and in 1677/'^ a nd,,j^ stated iq jts recitalj h^dfor 
i ts o bject the '^prevention of many fraudulent practices, which^are 
c omm only endeavored to be upheld by perjury and subornation of 
perjury." 

The original statute contains two sections — ^the fourth and the 
seventeenth — which affect the form of certain simple contracts.** 

These sections have been substantially followed by the statutes 
of most of our states, but in some states there are material varia- 
tions. These variations will be noticed as we go along. 

As the seventeenth stction differs materially from the fourth, it 
will be better to treat them separately. In doing so we shall con- 
sider (1) the nature of the contracts specified, (2) the form required, 
and (3) the effect of failure to comply with the provisions of the 
statute. 

STATUTE OF FRAUDS— IN GENERAL a 

37. The statute does not apply to— ' • " 

(a) Contracts created by law. 

(b) Instruments created under, and deriving their obligation 

from, special statutes. 

(c) Executed contracts. 

T 26 Cyc. 1350. • Post. p. 207. 

• Rev. St. U. S. SS 4898, 4955 (U. S. Comp. St 1901, pp. 3387, S407>. 

io See Minor and WurtB ou Keui i'lopeity, p. 080. 

118 St at Large, 405. 

11 For the provisions of sections 4 and 17, aee post, pp. 80, 121. 



§ 37) STATUTE OF FRAUDft— IN GENERAL 79 

Before taking up in turn the special contracts specified in these 
sections, it is proper to state the kinds of contract generally to 
which the katutc does not apply. 

In the first place, it applies only to contracts made in fact ; it does 
not include so-called contracts created by law, or quasi contracts. 
If a duty is imposed by law to pay money or perform other duties, 
without an agreement or promise in fact, no writing is necessary 
to support an action on the implied assumpsit^* 

Nor does the statute apply to such instruments as arc created un- 
der, and derive their obligation from, special statutes, without the 
acceptance or assent of the party for whose ultimate benefit they 
arc given, — ^as in the case of an undertaking on appeal, the requi- 
sites of which are prescribed by a special statute.** 

Nor does the statute have any effect where the contract has been 
executed on both sides, for the purpose of the statute is to exclude 
parol evidence of the contracts within their provisions, and not to 
prohibit execution of oral contracts. It appli es to execut ory con - 
tr acts only .** We shall see, in treating of the particular kinds of 
contracts, that under some circumstances part performance may 
take them out of the statute. 

Executory oral agreements, modifying prior written contracts, are 
within the statute ; *• and they may not be proved, for the admission 

IS Goodwin ▼• Gilbert, 9 Mass. 610; Arnold ▼. Garst, 16 IL I. 4, 11 Atl. 167; 
Pike y. Brown, 7 Gush. (Mass.)' 133 ; Sage y. Wilcox, 6 Gonn., at page SI ; 
Smith y. Bradley, 1 Root (Gonn.) 150; Howard y. Whltt (Kj,\ 2 S. W. 776: 
poet, p. 119, note 90. See **FraudM, Statute of;* Dec. Dig. {Key-No.) {{ 124, 
125; Cent. Dig. U ^7^277%. 

14 Thompson y. Blanchard, 8 N. Y. 385 ; DooUtUe T. Dlnlnny, 81 N. Y. 850. 
Bee **Fraud9, Statute of,*' Dec Dig. {KethNo.) i 121; Cent. Dig. ({ HO, 269. 

li STONE V. DENNISON, 13 Pick. (Mass.) 1, 23 Am. Dec. 054^ Throckmor- 
ton, Gas. Gontracts, 54; Lord Bolton y. Tomlln, 5 AdoL ft El. 856; Brown 
y. Trust Go., 117 N. Y. 266, 22 N. B. 952 ; Schults y. Noble, 77 GaL 79, 19 Pac. 
182 ; Swanzey y. Moore, 22 lU. 63, 74 Am. Dec. 134 ; James y. Morey, 44 III 
352 ; Bibb y. AUen, 149 U. S. 481, 18 Snp. (^ 960, 87 I4. Ed. 819 ; Webster y. 
Le Gompte, 74 Md. 249, 22 Atl. 232; Baldock y. Atwood, 21 Or. 73, 26 Pac. 
1058; Plreaox y. Simon, 79 Wis. 392, 48 N. W. 674; Anderson School Tp. y. 
MUroy liOdge, 130 Ind. 108, 29 N. E. 411, 30 Am. St Rep. 206; Doherty y. 
Doe^ 18 Golo. 456, 33 Pac. 165; Lagerfelt y. McKle, 100 Ala. 430, 14 Soath. 
281 ; Hatton y. C^ale, 152 Iowa, 485, 132 N. W. 1101 (contract for digging and 
use of ditch through land of another) ; James y. Manning, 79 Kan. 830, 101 
Pac. 628; Kuhn y. Poole^ 27 OkL 534, 112 Pac. 962 (contract for construction 
and use of party wall). Bee -Frauds, Statute of;* Deo, Dig. ffey-No.) 1 1S9; 
Cent. Dig. U SSJh^U. 

i«^tead y. Dawber, 10 Adol. ft EL 57; Marshall y. Lynn, 6 Mees. ft W. 109; 
SwalW y. Seamens, 9 WaU. 254, 19 L. Ed. 554; Hm y. Blake, 97 N. Y. 216; 
Abell y. Munson, 18 Mich. 806, 100 Am. Dec. 165; Bums y. Real-Estate Go., 
52 Minn. 81, 58 N. W. 1017 ; Wlalter t. Victor G. Bloede Go., 94 Md. 80, 60 



\ 



/ 



80 STATUTS OF FRAUDS (Ch. 4 

of such evidence could only be for the purpose of showing a con- 
tract part of which is not in writing.^^ Where such agreements 
have been executed, however, they may be proved, for the purpose 
of the statute is only to prevent the enforcement of executory oral 
agreements.** 

So a subsequent oral agreement for the rescission or waiver of 
the original written contract is valid, where it is clearly proved and 
nothing further remains to be done by the parties for its complete 
execution.*' 




SAME— CONTRACTS WITHIN SECTION 4 

38. The fourth section of the English statute, which has been sub- 
stantially followed in most of the states, enacts that ''No 
action shall be brought, 

(a) ''Whereby to charge any executor or administrator upon any 

special promise, to answer damages out of his own estate ; 

(b) "Or whereby to charge the defendant upon any special prom- 

ise to answer for the debt, default, or miscarriages of an- 
other person; 

(c) "Or to charge any person upon any agreement made upon 

consideration of marriage; 

(d) "Or upon any contract or sale of lands, tenements, or here- 

ditaments, or any interest in or concerning them; 

(e) "Or upon any agreement that is not to be performed within 

the space of one year from the making thereof; 
"Unless the agreement upon which such action shall be 
brought, or some memorandimi or note thereof, shall be in 
writing, and signed by the party to be charged therewith, 
or some other person thereunto by him lawfully author- 
ized." " 

Atl. 433. Contra: Cummlngs ▼. Arnold, 8 Mctc (Mass.) 486, 87 Am. Dec. 
155 ; Stearns v. Hall, 9 Cush. (Mass.) 31 ; Whlttier t. Dana, 10 Allen (Mass.) 
326; Negley ▼. Jeffers, 28 Ohio St 90. See '^Frauds, Statute of/* Dec. Dig. 
{KeV'No.) t ISl; Cent. Dig. §§ JB85, 28^. 

IT Bonlcamp v. Starbuck, 25 Okl. 483, 106 Pac. 839. See **Fraud9, Statute 
of;* Deo. Dig. (Key-No.) { ISl; Cent. Dig. §{ 28S, 28J^ 

i« Blake ▼. J. Nells Lumber Co., Ill Minn. 513, 127 N. W. 450; Gerard-Fllllo 
Co. V. McNalr, 68 Wash. 321, 123 Pac. 462. See **Frauds, Statute of^* Dec. 
Dig. (Key-No.) ( ISl; Cent. Dig. {{ £85, 284. 

i» Warden ▼. Bennett, 145 Ky. 325, 140 S. W. 538; Gerard-FllUo Co. ▼. Mc- 
Nalr, 68 Wash. 321, 123 Pac. 462. And see post, p. 533. See '^Frauds, Statute 
of;' Dec. Dig. (Key-No.) { 14O; Cent. Dig. (( 156, Si2. 

30 8 St. at Large, 405. 



• f 40) PROMISE TO ANSWER FOH DEBT, ETC., OF ANOTHER / 81 



SAME— PROMISE BY EXECUTOR. OR ADMINISTRATOR 

39. The statute applies only to promises — ^ J-^ <^ ^ C ^ 

(a) To answer for debts or liabilities of the deceased, and 

(b) To answer for them out of the property of the promisor. 

• 

An executor or administrator may sue or be sued upon obliga- 
tions devolving upon him as the representative of the deceased, 
and he may be compelled to carry out the directions of the deceased 
in respect of legacies, or to give effect to the rules of law relating 
to the division of the estate of an intestate ; but in neither case is 
he bound to pay anything out of his own pocket. His liabilities are 
limited by the assets of the deceased. He may, however, if he 
chooses, to save the credit of the deceased, or for any other reason, 
make promises to answer for damages or pay debts — ^which is in- 
cluded in the expression, "answer damages"— out of his own es- 
tate; but, in order that the promise may be binding on him, it 
must be in writing, signed by him or his agent. 

The statute only applies to promises to answer for debts or lia- 
' bilities of the decedent. It does not apply to original undertak- 
ings by the executor or administrator, and a promise, therefore, by 
an executor to pay the heir money if he will forbear further oppo- 
sition to the probate of the will, is not within the statute.*^ Nor 
does it apply to promises to pay debts of the decedent out of the 
assets of the estate.** ^^ (V 

SAME— PROMISE TO ANSWER FOR DEBT, DEFAULT, OR 

MISCARRIAGE OF ANOTHER / , , ; ? ' - 

• 40. The foUowmg points should be noted: / 

(a) The debt, default, or miscarriage must be that of ''another 
person," and, therefore, for the statute to apply, 
(1) There must be either a present or prospective primary 
liability of a third person for which the promisor 
agrees to answer. He must not himself be or become 
primarily liable. 

/»! BBIiLOWS V. SOWLES, 67 Vt 164, 52 Am. Rep. 118, Throckmorton. 
/Cas. Contracts, 56* And see FehUnger ▼. Wood, 184 Pa. 617, 19 Atl. 746; 
Wales V. Stout, 116 N. Y. 638, 21 N. B. 1027; Mackln v. Dwyer, 205 ^fasa. 
472, 91 N. B. 898; Blake y. Robinson, 129 Iowa, 196, 106 N. W. 401. Bee 
''Frauds, Statute of;* Dec. Dig. (Key-No.) §{ 7-12; Cent. Dig. U 7-i2. 

*t Stebbina t. Smith, 4 Pick. (Mass.) 97; Pratt ▼. Humphrey, 22 Conn. 817. 
Bee '•Frauds, St<^tute of,** Dee. Dig. (Key-No,) {§ 7-12; Cent, Dig, |( 7-12. 

Clabk CoifT.(3D Ed.) — 6 



r /Cv^-o 



3 




83 tTATlTTS OF rRAUDS (Ql. 4 . 

^(2) The liability of the third person, therefore, must con- 
tinue. 

(b) A promise which contemplates pa}rment out of the debtor's 

property in the hands of the promisor is not within the 
statute. 

(c) Nor is a promise to the debtor to pay his debt. - . 

(d) Nor, according to the weight of authority, does the statute \ 
app\y where the leading object of the promisor is to sub- | 
serve some purpose of his own, and his promise is merelyy 
incidental / 

(e) By the weight of authority a contract of indemnity is not 

within the statute, although if the promise is to answer for 
another's debt, it is within the statute, notwithstanding it 
is in the form of a contract of indemnity. 

'*Deht, Default, or Miscarriage^' 

The words "debt, default, or miscarriage" include all liabilities 
of a third person, however they may arise, and therefore include 
liabilities arising out of a wrong or tort, as well as those arising 
out of contract.** They also include prospective as well as existing 
liabilities. "If the future primary liability of a principal is contem- 
plated as the basis of the promise of a guarantor, such promise is 
within the statute of frauds, precisely as it would be if the liability 
existed when the promise was made.*' •* Nor does it matter that the 
debt or obligation of the third party is voidable by him.** 

"Of Another Person" 

The promise contemplated by the statute is a promise to answer 
for the debt, default, or miscarriage of "another person;" or, in 
other words, a contract of guaranty or suretyship. The statute does 
not apply to original promises or undertakings, though the benefit 
accrues to another than the promisor. There must be three par- 

»• Kirkham ▼. Marter, 2 Bam. ft Aid. 613, 18 B. O. L. 212, 21 Rev. Rep. 416; 
Turner y. Hubbell, 2 Day (Conn.) 457, 2 Am. Dec 116 ; Mountstephen y. Lake- 
man, L. R. 7 Q. B. 202. A promise, howeyer, to glye notice to another before 
settling with a third party who is indebted to the promisee is not within ' 
the statute. Towne y. Grover, 9 Pick. (Mass.) 306. Bee *'Fraude, Statute of," 
Deo, Dig. {Key-yo.) t 14; Cent Dig. ( 14. 

s« Mead y. Watson, 57 Vt 426. And see Matson y. Wharam, 2 Term R. 
80; Matthews y. Milton, 4 Yerg. (Tenn.) 576, 26 Am. Dec. 247. See "Praude, 
Statute of," Dec. Dig. (Key-No.) ( 14; Cent. Dig. ( 14. 

SB Dexter y. Blanchard, 11 Allen (Mass.) 365; Brown y. Farmers* ft Mer- 
chanU* Nat Bank^ 88 Tex. 265, 81 S. W. 285, 33 Ia R. A. 359 and note. 
Ck)ntra, King y. Summitt, 73 Ind. 312, 88 Am. Rep. 145. See **Fraude, Statute 
of," Deo. Dig. (Key-No.) §{ i^ 15; Cent. Dig. (§ IJ^IS. 



§ 10) PROMISE TO AKSWEB FOB DEBT, ETC., OF ANOTHEB 83 

ties in contemplation, — a person who is actually or prospectively 
liable to another person, and a third person who promises the cred- 
itor to answer for the debt or liability ; or, in other words, a cred- 
itor, a principal debtor, and a guarantor of the debt, or surety.**' 
This distinction is well illustrated by an old case in which it was 
held that a promise to pay if the promisee will lend money to a 
third person is within the statute, but a promise to pay if the prom- 
isee will pay money to a third person is without.'^ Although there 
is considerable co^iflict among the courts in their construction of 
this clause of the statute, the following rules for determining 
whether a contract comes within it are established by the weight 
of authority : 

(a) There must be either a present or prospective liability of a 
third person for which the promisor agrees to answer.** If the 
promisor becomes himself primarily, and not collaterally, liable, the 
promise is not within the statute, though the benefit from the trans- 
action accrues to a third person.** If, for instance, two pe rson s 
co me into a store, and one buys, a'nd the othe r, to ^in him credit, J 
promises the seller. "If he does not pay vou. I wilL'* .this_ is .a^i^ollai- / 
eral undertaking, and must be in writing ; but if he says, "Let him ^ii 
have the goods, and I will pay,'* o r "Ijwill jsee ypu^paid," and credit 
is given to h im alb ne, he is him self the buyer, and the undertaking 
is origina l?* Iii other words, whether the promise in such a case is 

«• NUGENT ▼. WOLFE, 111 Pa. 471, 4 AtL 15, 66 Am. Rep. 291, Throck- 
morton. Gas. Gontracts, 62. Bee **Frauds, Statute oU** Deo. Dig. iKey-No,) 
i 61; Cent. Dig. | SS. i 

S7 Butcher y. Andrews, Gomberbach, 473 (Holt, 0. JJ. Bee **Fraude, Statute 
of,*' Deo. Dig. {^ey-No.) H ^0, 21; Cent. Dig. (( S2, SS. 

at Mease v. Wagner, 1 McGord (S. G.) 396. See **FraudM, Statute of,** Dec. 
Dig. (Key-No.) ( 15; Cent. Dig. |{ 15, 16. 

a» Hargreayes y. Parsons, 13 Mees. ft Wel& 661; Baldwin ▼. Hlers, 73 Ga. 
739; Morris v. Osterhout, *66 Micb« 262, 21 N. W. 339; De Witt ▼• Root, 18 
Neb. 567, 26 N. W. 360. Where an agent has become liable to his principal 
by lending money contrary to instructions, his guaranty of the loan is not 
within the statute. Grane y. Wheeler, 48 Minn. 207, 60 N. W. 1033. A promise 
by a married woman to pay her parent for her support was held a promise 
to pay her husband's debt. Perkins v. Westcoat, 3 Golo. App. 338, 33 Pac 139. 
See "Fmude, Statute of," Dec. Dig. (Key-No.) { 2S; Cent. Dig. {$ 18, 19. 

•0 LARSON ▼. JENSEN, 63 Mich. 427, 19 N. W. 130, Throckmorton, Gas. 
Gontracte, 60; Hartley v. Varner, 88 lU. 561; Nelson v. Boynton, 3 Mete. 
(Masa) 396, 37 Am. Dec 148 ; Greene ▼. Burton, 69 Vt 423, 10 AtL 575 ; Geelan 
Y. Reid, 22 IlL App. 165; Higgins v. Hallock, 60 Hun, 126, 14 N. T. Supp. 
550; Boston v. Farr, 148 Pa. 220, 23 Atl. 901; Growder v. Keys, 91 Ga. 180, 
16 S. £. 986; Bums ▼. Bradford-Kennedy Lumber Go., 61 Wash. 276, 112 
Pac. 369. The same is true where a person says: '*If I am to do certain 
work for M., I must be assured of payment by some one," and the person 
addressed says, "Do it, and I will see you paid." Mountstephen y. Lakeman, 



N.. 



84 STATUTE OF FRAUDS (Ch. ^ 

within the statute depends on how the credit was given. If it was 
given exclusively to the promisor, his undertaking is original;'* 
but it is collateral if any credit was given to the other party. •■ So 
an oral acceptance of a bill of exchange or other order for the pay- 
ment of money is not within the statute, for the reason that the ac- 
ceptor becomes the party primarily liable on the instrument.'* 

(b) Even though there is an existing liability t)f a third person 
for which the promisor undertakes to answer, still the promise is 
not within the statute if the terms are such that it effects an extin- 
guishment of such liability; in other words, the liability of the 
original debtor must continue. A promise to pay another's debt 
in consideration of the creditor's doing something which will ex- 
tinguish his claim against the debtor, and release him absolutely, 

L R. 7 H. L. 17. And see cases cited above and in the following notes. See 
"Frau4s, Statute of,'' Deo. Dig. {Key-No,) ( 2S; Cent, Dig. §§ 18, 19. 

•1 Cbase v. Buy, 17 Johns. (N. Y.) 114; Hartley ▼. Vamer, 88 lU. 661; Myer 
T. Grafflin, 81 Md. 350, 100 Am. Dec- 66; Grant y. Wolf, 34 BCinn. 62, 24 N. 
W. 289; Ellis y. Murray, 77 Ga. 542; Hagadom y. Stronach Lumber Co., 81 
Mich. 56, 45 N. W. 650; Peyson y. Gonniff, 32 Neb. 269, 49 N. W. 340; Mackey 
y. Smith, 21 Or. 598, 28 Pac. 974; Herendeen Mfg. Co. y. Moore, 66 N. J. Law, 
74, 48 AtL 525 ; Lusk y. Throop, 189 IlL 127, 59 N. B. 629. Where defendant 
gaye plaintiff directions to giye his (defendant's) saboontractors material, and 
charge it to them, which was done, and eyery month he (defendant) would 
pay the bill, it was held not to show that credit was glyen thct subcontxactois, 
and that the undertaking was original. Manrin y. Fogelberg, 37 Minn. 28, 32 
N. W. 858, 5 Am. St Rep. 814. And see Owen y. Steyens, 78 lU. 462; Schoen* 
feld y. Brown, 78 IlL 487. See *'\Fraud8, Statute of,** Deo. Dig. (Key-No.) i 
26; Cent. Dig. §( 35^m^ 

»t Birkmyr y. DarneU, 2 Ld. Raym. 1085, Mod. 248, 8 Salk. 27, Holt 606, 92 
Eng. Reprint, 219, 1 Sm. h. C. (11th Ed.) 299; Welch y. Manrin, 36 Mich. 
59; Cahm y^ Bigelow, 18 Pick. (Mass.) 369; Norris y. Graham, 33 Md. 56; 
Northern Ont By. Co. y. Prentiss, 11 Md. 119 ; Aldrlcfa y. Jewell, 12 Yt 125, 
36 Am. Dec. 330; Matthews y. Milton, 4 Yerg. (Tenn.) 576, 26 Am. Dec. 247; 
Baldwin y. Hiers, 73 Ga. 739; Blank y. Dreher, 25' 111. 331; Langdon y. Rich- 
ardson, 58 Iowa, 610, 12 N. W. 622; Bugbee y. Eendrlcken, 130 Mass. 437; 
Mead y. Watson, 57 Vt 426; Stndley y. Barth, 54 Mich. 6, 19 N. W. 568; 
Robertson y. Hunter, 29 S. C. 9, 6 S. B. 850; Harris y. Frank, 81 Cal. 280, 
22 Pac. 856; Rottmann y. Pohlmann, 28 Mo. App. 399; Clark y. Jones, 87 
Ala. 474, 6 South. 362 ; Waters y. Shafer, 25 Neb. 225, 41 N. W. 181 ; Swaboda 
y. Throgmorton-Bnice Co., 88 Ark. 592, 115 S. W. 380; Johnson y. Bank, 60 
W. Va. 320, 55 S. E. 394, 9 Ann. Cas. 893, and note; Wood y. Dodge, 23 S. D. 
96, 120 N. W. 774; Peele y. PoweU, 156 N. C. 553, 73 S. E. 234. The 'question 
whether the promise Is original or collateral is usually one for the jury, under 
instructions from the court Johnson y. Bank, supra; McGowan Commercial 
Co. y. Midland Coal ft Lumber Co., 41 Mont 211, 108 Pac. 655. Sec ''Frauds, 
Statute of,** Dec. Dig. (Key-No.) ( 26; Cent. Dig. §§ 55--{2%. 

••Edward Hines Lumber Ck). y. Anderson, 141 111. App. 527. See ante, p. 
77. See "Frauds, Statute of,** Dec. Dig. {Key-No.) § 27; Cent. Dig. IS 4^, ii- 



S 40) PBOMISE TO ANSWEB FOB DEBT, ETC., OF ANOTHEB 85 

need not be in writing.'* To tak^ t he prnmig^ nut nf f\ie §f:tttit<>. 
t he oriprial debtor^s release piust be absolute . If the creditor may 
still hold him liable at his option, the promise must be in writing.'* 
' Novations fall within this class of agreements. 

(c) The promise must contemplate payment by the promisor out 
of his own property, or, at least, not out of the property of the 
debtor, from which, or from the proceeds of which, the promisor is 
under a duty to pay, or is authorized to pay ; for in such a case the 
payment is, in effect, by the debtor.** The statute has no applica- 
tion to "cases where the original debtor places property of any kind 
in the hands of a third person, and that person promises to pay the 
claims of a particular creditor of the debtor. The promise, in such 
case, is an original promise, and the property placed in his hands is 

m 

•« Bird y. Gammon, 2 Bing. N. O. 883 ; Anstey ▼. Marden, 1 B. ft P. New Rep. 
124; Goodman t. Chase, 1 Bam. ft Aid. 297; Peeters y. Lamborn, 43 Ohio St. 
144, 1 N. E. 513; Andre y. Bodman, 13 Md. 241, 71 Aol Dec. 028; Meriden 
Britannia Go. y. Zlngsen, 48 N. Y. 247, 8 Am. Rep. 540; Runde y. Rnnde, 59 
111. 98 ; Green y. Solomon, 80 Mich. 234, 45 N. W. 87 ; GarUsle y. Campbell, 76 
Ala. 247 ; Palmer y. Witcherly, 15 Neb. 98, 17 N. W. '384 ; Eden y. Chaffee. 
160 Mass. 225, ^ N. E. G75 ; Hamlin y, Dnimm<»id, 91 Me. 175^ 89 Atl. 551 ; 
Ferst y. Bank, 111 Ga. 229, 36 S. E. 778 ; Hanson y. Nelson, 82 Minn. 220, 84 
N. W. 742. See **Fraud8, Statute of," Deo. Dig. (Key-yo.) i SI; Cent, Dig. H 

•B Nelson y. Boynton, 8 Mete. (Mass.) 396, 87 Am. Dec 148; Wasffoner y. 
Gray's Adm'rs, 2 Hen. ft M. (Va.) 612; Pfaff y. Cumminss, 67 Mich. 148, 34 
N. W. 281 ; Gray y. Hennan, 75 Wis. 463, 44 N. W. 248, 6 L. R. A. 691 ; Murto 
y. McKnight, 28 111. App. 238 ; Miller y. Lynch, 17 Or. 61, 19 Pac. 845 ; Brant 
y. Johnson, 46 Kan. 389, 26 Pac. 735 ; Rlegelman y. Focht, 141 Pa. 880, 21 Atl. 
601, 23 Am. St Rep. 293 ; Greene y. Latcham, 2 Colo. App. 416, 31 Pac 233. 
The fact that a lien against the original debtor is released has been held im- 
material if the debtor himself remains liable. Nelson y. Boynton, supra; 
Mallory y. Gillett, 21 N. Y. 412. See post, p. 87. A promise to pay another's 
debi merely if the promisee will forbear to sue the debtor, which he does, is 
within the statute. Gump y. Halberstadt, 15 Or. 356^ 15 Pac 467 (collecting 
cases on this point) ; Watson y. RandaU, 20 Wend. (N. T.) 201 ; White y. Rin- 
tool, 108 N. (Y. 222, 15 N. E. 31& And see Keadle y. Siddens, 5 Ind. App. 8, 
81 N. E. 639; Dillaby y. Wilcox, 60 Conn. 71, 22 Ati. 491, 13 U R. A. 643, 25 
Am. St Rep. 299; Parker y. Dillingham, 129 Ind. 542, 29 N. E. 23. See 
*'Frauds, Statute of," Dec Dig. {Key-No.) { SI; Cent. Dig. H 47. 48. 

•• Williams y. Leker, 3 Burr. 1886 ; Dock y. Boyd, 93 Pa. 92 ; Farley y. Cleve- 
land, 4 Cow. (N. Y.) 432, 15 Am. Dec. 387; Peck y. Goff, 18 R. I. 94, 25 Atl. 
690; Woodruff y. Scalfe, 83 Ala. 152, 8 South. 311; Belknap y. Bender, 75 N. 
Y. 446, 31 Am. Rep. 476 ; Ackley y. Parmenter, 96 N. Y. 425, 50 Am. Rep. 693 ; 
Hughes y. Fisher, 10 Colo. 383, 15 Pac 702 ; Fehllngef y. Wood, 134 Pa. 517, 
19 AtL 746; Leake y. BaU, 116 Ind. 214, 17 N. E. 918; Silsby y. Frost, 3 
Wash. T. 388, 17 Pac. 887; Ledbetter y. McGhees, 84 Ga. 227, 10 S. B. 727; 
Mitts y. McMorran, 85 Mich. 94, 48 N. W. 288; Keyes y. Allen, 65 Vt 667. 
27 Atl. 319. But see Gower y. Stuart, 40 Mich. 747; Frame y. August, 88 
IlL 424. See **Fraud8, Statute of,*' Dec, Dig. {Key-No.) | S4; CenL Dig, { 54. 



T 



86 STATUTG OF FRAUDS (Ch. 4 

its consideration. In this class of cases it is immaterial whether the 
liability of the original debtor continues or not." *^ 

(d) A promi se to^j^ anpther^s debt^.to cor*^ within t*^* '^^^^iltti 
must be made to the f^ rg( jitnrr and not to the debtor . A promise to 
the debtor himself to pay his debt for him does not require writ- 
ing.*' Illustrations of this are where a person buys land or goods, 
and agrees to pay the purchase money to a creditor of the seller, or, 
as part of the consideration, assumes a mortgage or other indebted- 
ness of the seller. This is no more than a promise to pay the prom- 
isor's own debt in a particular way.** 

(e) "If the principal and immediate object of the transaction is 
to benefit the promisor, not to secure the debt of another person, 
the promise is considered, not as collateral to the debt of another, 
but as creating an original debt from the promisor, which is not 
within the statute, although one effect of its payment may be to 
discharge the debt of another." *• Under this rule the holder of k 
note or other security is bound by an oral guaranty of its payment, 

tv Wait T. Walt's Ez'r, 28 Vt 850. Bee **Fraud9, Statute of," Dec. Dig. 
(Key-No.) ^ $4; Cent. Dig. % 64. 

*• Eastirood T. Kenyon, 11 Adol. A B. 438; Windell t. Hudson, 102 Ind. 521, 
2 N. E. 803 ; Alger v. Scoville, 1 Gray (Mass.) 391, 895 ; Harwood t. Jones, 10 
Gill A J. (Md.) 404, 32 Am. Dec 180; Mersereaa v. Lewis, 25 Wend. (N. Z.) 
243; Ware ▼. Allen, 64 Miss. 545, 1 South. 738, 60 Am. Rep. 67; Wood t. 
Moriarty, 15 R. I. 518, 9 Atl. 427 ; Clark t. Jones, 85 Ala. 127, 4 South. 771 ; 
Meyer v. Hartman, 72 111. 442; Rabbermann ▼. Wlskamp, 54 IlL 179. See 
"\Fraud8, Statute of," Deo. Dig. (Key-No.) i J 8;, Cent. Dig. |i 27-^1. 

•• Barker ▼. Bucklin, 2 Denlo (N. Y.) 45, 43 Am. Dec. 726 ; Wilson t. Bevans, 
58 111. 232; Clinton Nat Bank v. Studemann, 74 Iowa, 104, 37 N. W. 112; 
Delp T. Brewing Co., 123 Pa. 42, 15 Atl. 871; Bateman v. Butler, 124 Ind. 
223, 24 N. E. 989 ; Hooper ▼. Hooper, 32 W. Va. 526, 9 S. E. 937 ; Skinker v. 
Armstrong, 86 Va. 1011, 11 S. E. 977; Neiswanger v. McClellan, 45 Kan. 599, 
26 Paa 18; Morris ▼. Gaines, 82 Tex. 255, 17 S. W. 538; Tuttle t. Armst'ead, 
53 Conn. 175, 22 Atl. 677; Mulvany y. Gross, 1 Colo. App. 112, 27 Pac. 878; 
Lowe T. Hamilton, 132 Ind. 406, 31 N. E. 1117; American Pencil Co. ▼. Wolfe, 
30 Fla. 360, 11 South. 488 ; Scudder v. Carter, 43 111. App. 252 ; Elkin ▼. Tim- 
lin, 151 Pa. 491, 25 Aa 139 ; First Nat Bank of Sing Sing ▼. Chalmers, 144 
N. Y. 342, 39 N. E. 331. See '^Frauds, Statute of," Deo. Dig. (Key-No.) i 18; 
Cent. Dig. ff ZJ-Sl. 

40 Furbish v. Goodnow, 98 Mass. 296, per Gray, J. And see Prime v. Koeh- 
ler, 77 N. Y. 91; HoweU ▼. Harvey. 65 W. Va. 310, 64 a E. 249, 22 L. R. A. 
(N. S.) 1077; Emerson ▼. Slater, 22 How. 28, 16 L. Ed. 360; LitUe y. Edwards, 
69 Md. 499, 16 AtL 134; Davis v. Patrick, 141 U. S. 479, 12 Sup. Ct 58, 35 
L. Ed. 826; Mitchell v. Beck, 88 Mich. 342, 50 N. W. 305; First Nat Bank 
of Sing Sing v. Chalmers, 120 N. Y. 658, 24 N. B. 848; Ferst v. Bank of 
Waycross, 111 Ga. 229, 36 S. E. 773. An oral promise by an attorney to 
prosecute a suit and pay all the cost, and, if successful, to have half the 
amount recovered, otherwise nothing, was held not within the statute. Wll- 
dey T. Crane, 69 Mich. 17, 36 N. W. 734. A contract of reinsurance has been 



§ 40) PBOMI8E TO AK8WBB FOB DEBT, ETC., OF ANOTHEB S7 

made for the purpose of inducing another to purchase it/^ So the 
promise by a del credere agent to his principal to guaranty the sol- 
vency of the persons to whom he sells goods is not within the stat- 
ute ; *• the agent becomes himself responsible for the payment of 
the money, and it is only incidental that he expects his obligation 
to be discharged by the person to whom he sells the goods.** 
Again, if a creditor has, or is about to file, a lien on property to se- 
cure his claim, and a third person, whose interests are or may be 
prejudiced thereby, guarantees the debt in consideration of a re- 
lease of the lien or forbearance to file it, his object is to remove or 
prevent the lien, and the guaranty is merely incidental, and some 
courts hold that it need not be in writing,** though the weight of 
authority is probably to the contrary where the liability of the 
debtor continues.** And it has even been held that where the own- 
er of a building, on which the contractor has abandoned work, 
promises to pay the contractor's workmen what is due them from 

held not within the statute. Bartlett t. Insurance Co., 77 Iowa, 155, 41 N. 
W. 601. But see, contra, Egan v. Insurance Co., 27 La. Ann. SOS. Bee **Frauds, 
Statute of:' Dec Dig. {Key-Ho,) f SS; Cent. Dig. if 50^S, 56. 

«i Brown ▼. Curtlss, 2 N. Y. 225; Milks t. Rich, 80 N. Y. 209, 86 Aul Rep. 
615; CardeU ▼. McNlel, 21 N. Y. 838; Darst ▼. Bates, 05 111. 493, at page 512. 
And see. In case of assignment and guaranty of judgment. Little ▼. Edwards, 
69 Md. 499, 16 Atl. 134. So, also, where a person having property of his 
debtor to sell for payment of the debt guaranties the title to Induce the 
promisee to buy It Famham t. Chapman, 61 Vt 395, 18 Atl. 15Z But see 
Dows ▼. Swett, 184 Mass. 142, 45 Aul Rep. 810. Bee 'VmiMlf, Btatute of,** 
Dee. Dig. (Key-yo.) { SS; Cent. Dig. H SOSS, 56. 

4s Couturier t. Hastle, 8 Ezch. 40, 5 H. L. Cas. 673; Sherwood t. Stone, 
14 N. Y. 267 ; Wolff v. Koppel, 5 Hill (N. Y.) 458 ; Id., 2 Denlo, 8G8, 43 Am. 
Dec 751 ; Swan v. Nesmlth, 7 Pick. (Mass.) 220, 19 Am. Dec 282. Bee "Frauds, 
Btatute of,"* Dec. Dig. (Key-No.) f SS; Cent. Dig. ff 50^S, 56. 

«• Wolff ▼. Koppel, supra. Bee **Frauds, Btatute of/* Deo. Dig. iKev-Ifo.) f 
SS; Cent. Dig. H 50^S, 56. 

«« Fitzgerald ▼. Dressier, 7 C. B. (N. S.) 374; Smith y. Exchange Bank, 110 
Pa. 508, 1 AtL 760 ; Wms ▼. Brown, 118 Mass. 138 ; Prime ▼. Koehler, 77 N. 
Y. 91; Dunlap ▼. Thome, 1 Rich. (S. C.) 213; Shook ▼. Vanmater, 22 Wis. 
532; Crawford T. King, 54 Ind. 6; Helt ▼. Smith, 74 Iowa, 667, 39 N. W. 
81 ; Rogers ▼. Hardware Co., 24 Neb. 653, 39 N. W. 844 ; Scott ▼. White, 71 
111. 287; Borchsenlus ▼. Canutson, 100 IlL 82; Power ▼. Rankin, 114 IlL 62, 
29 N. E. 185; Wooten t. WUcoz, 87 Ga. 474, 13 S. E. 595; Flagler y. Upman, 
1 Mlsc Rep. 204, 20 N. Y. Supp. 878. See "Frauds, Statute of,** Dec Dig. 
CKey-No.) { SS; Cent. Dig. ff SO-^S, 56. 

«» Nelson ▼. Boynton, 3 Mete (Mass.) 396, 37 Am. Dec 148; Curtis ▼. Brown, 
ft Cush. (Mass.) 488 ; Mallory y. Glllett, 21 N. Y. 412 ; Bunneman y. Wagner, 
16 Or. 433, 18 Pac 841, 8 Am. St Rep. 300; Clark y. Jones, 85 Ala. 127, 4 
South. 771; Stewart y. Jerome, 71 Mich. 201, 38 N. W. 895, 15 Am. St Rep. 
252 ; Warner y. Wllloughby, 60 Conn. 468^ 22 AtL 1014, 25 Am. St Repi 343 ; 
Simpson y. Harris, 21 Ney. 353, 31 Pac 1000. See "Frauds, Statute of,*' Deo. 
Dig. (Key-No.) f SS; Cent. Dig. f| 50^5S, 56. 



88 ftTATUTB OF FRAUDS (Ch. 4 

the contractor if they will go on with the work, the undertaking i» 
^ • original ; *• but this decision is a very doubtful one. The contrary 
has repeatedly been held.*^ 

But the mere receipt by the promisor of some consideration or 
benefit for his promise is not sufficient to take it out of the statute^ 
if the principal object of the contract is to pay the debt of an- 
other." 

Promise to Indemnify 

There is no subject connected with the statute of frauds that is 
more difficult or has given rise to greater variety of opinion than 
contract? of indemnity. Is a promise to indemnify or save another 
harmless from any liability that he may incur as the result of a 
transaction into which he enters at the instance of the promisor — 
as rn the case of a promise to indemnify the promisee against loss 
from going bail for another — within the statute? In England,* •^ 

• and by the decided weight of authority in this country,** such con- 

«• Andre ▼. Bodman, 13 Md. 241^ 71 Am. Dec. 628 (In this case the daim 
against the contractor, It seems, was given up, so that there no longer ex<. 
Isted any primary Uahillty of a third person) ; Crawford ▼. Edison, 45 Ohio 
St 239, 13 N. E. 80; Greenough ▼. Eichholtz (Pa. Sup.) 15 Atl. 712; Buchanan 
y. Morfin, 62 Conn. 83, 25 Atl. 306; Graft T. Kendrlck, 89 Fla. 90, 21 South. 
603; Hall t. Alford, 105 Ky. 664, 49 S. W. 444; Raabe ▼• Sqoler, 14S N. Y. 
81, 42 N. B. 516 ; Almond y. Hart, 46 App. DIt. 431, 61 N. Y. Supp. 849. And 
see Sezt v. Gelse, 80 Ga. 698, 6 S. E. 174 (where the promise was to pay 
for material) ; Bice ▼. Building Co., 96 Mich. 24, 55 N. W. 882. 8^ **Fraud8, 
Btatute of;* Deo. Dig. {Key-No.) SS SI, S2; Cent. Dig. Sf 47-^9. 

«T See Famham v. Davis, 79 Me. 282, 9 Atl. 725 ; Greene T. Latcham, 2^ 
Colo. App. 416, 31 Pac. 233 ; Hutton Bros. ▼. Gordon, 2 Misc. Rep. 267, 23 N. 
Y. Supp. 770; Wilhelm ▼. Voss, 118 Mich. 106, 76 N. W. 308. Where a widow, 
continuing her deceased husband's business, promised her husband's creditor 
to pay his debt if he would sell her goods on credit, the promise was held to- 

• be within the statute. Ruppe T. Peterson, 67 Mich. 437, 35 N. W. 82. And 
see Dirringer v. Moynlhan (Com. PI.) 10 N. Y. Supp. 540. See "Fraude, Stat- 
ute 0/," Dec. Dig. (Key-No.) §§ SI, S2; Cent. Dig. t§ 47-49. 

«s Furbish v. Goodnow, 98 Mass. 296; Ames v. Foster, 106 Mass. 4(X), 8 Am. 
Rep. 343. See **Frauds, Statute of,** Dec. Dig. (Key-No.) { SS; Cent. Dig. if 
50-^S, 66. 

«» Thomas v. Cook, 8 Bam. & C. 728; Reader ▼. Klngham, 13 C. B. (N. S.) 
344 [overruling Green v. Creswell, 10 Ad. & E. 453] ; Sutton v. Grey [1894] 1 Q. 
B. 285; Wildes v. Dudlow, L. R. 19 Eq. Cas. 198. See *'Fraud», Statute of,*' 
Dee. Dig. (Key-No.) S§ 20, 21; Cent. Dig. ff S2, SS. 

BO Anderson ▼. Spence, 72 Ind. 315, 37 Am. Rep. 162; Aldrlch ▼. Ames, 9^ 
Gray (Mass.) 76; Beaman's Adm'rs v. Russel, 20. Vt 205, 49 Am. Dec. 775; 
Lerch t. Gallop, 67 Cal. 505, 8 Pac. 322; KeesUng v. Frazier, 119 Ind. 185, 
21 N. E. 552 ; Smith v. Delaney, 64 C:k>nn. 2G4, 29 Atl. 496, 42 Am. St Rep. 181 
and note; Jones ▼. Bacon, 145 N. Y. 446, 40 N. E. 216; Esch y. White, 76 Minn. 
220, 78 N. W. 1114; Warren v. Abbett, 65 N. J. Law, 99, 46 Ati. 675. See 
"Frauds, Statute of,** Dec. Dig. (Key-No.) ff 20, 21; Cent. Dig. ff S2, SS. 



I 41) AGREEMENT IN CONSIDERATION OF MARRIAGS 89 

tracts are not within the statute. There are a number of cases, 
however, holding the contrary.** It has sometimes been sought to 
distinguish between contracts within the statute and contracts of 
indemnity by saying without qualification that a promise of indem- 
nity is not within the statute; but this is misleading. The true 
t est is whether the promise is primary an d original or ^hether it is 
merely collateral. " Thus, if the promisor undertakes l:o become 
primarily and absolutely liable for any loss which the promisee 
may incur by acting upon the request of the promisor, his promise fs 
an original one, and need not be in writing; and it is a matter of 
no importance that another person is also liable to the promisee.*" 
The promisor's obligation is not to pay such other person's debt, 
but his own. If, however^ the main object and purpose of the 
promise is to answer for the debt or default of another for which 
that other is or becomes primarily liable, the promise is within the 
statute, even though it be in the form of a promise of indemnity.** 
This dictinction, however, has not always been observed or correct- 
ly applied in the cases, and in S9me instances there have been con- 
trary decisions on almost identical states of fact** 



SAME— AGREEMENT IN CONSIDERATION OF MAR- 
RIAGE / 

41. The statute applies to "any ag re ement m ade upon consideratio n 
q£ mar riage/ ^ I , 

this clause of the statute doe s not apply to mutual |)romisea.Jo 
m arrjT,* * But to promises in consideration of, or conditional upon, 

»i NUGENT T. WOLFE, 111 Pa. 471, 4 Atl. 1% 66 Am. Rep. 291, Throck- 
morton Cas. Contracts, 62; May ▼. Williams, 61 Miss. 125, 48 Am. Rep. 80; 
Hurt V. Ford, 142 Mo. 283, 44 S. W. 228, 41 L. R. A. 823 ; Wolverton v. Davis, 
85 Va. 64, 6 S. E. 610, 17 Am. St Rep. 66. See Browne, Stat Frands, S$ 161, 
162. Bee '•Frauds, Statute of," Dec. Dig. (Key-No.) H ^0, 21; Cent. Dig. ft 
S£, SS. 

»» NUGENT ▼. WOLFE. Ill Pa. 471, 4 Aa 15, 66 Am. Rep. 291, Throck- 
morton Cas. Contracts, 62. See "Fraude, Statute of,*' Deo. Dig. (Key-No.) SS 
20, 21; Cent. Dig. U S2, SS. 

fts Harrison ▼. Sawtell, 10 Johns. (N. Y.) 242, 6 Am. Dec. 337. See **Fraud8, 
Statute of," Dec. Dig. (Key-No.) §§ 20, 21; Cent. Dig. §§ S2, SS. 

6 4 NUGENT V. WOLFE, 111 Pa. 471, 4 Ati. 16, 56 Am. Rep. 291, Throck- 
morton Cas. Contracts, 62. See "Frauds, Statute of,** Deo. Dig. (Key-No.) K 
20, 21; Cent. Dig. SS S2, SS. 

•B See cases cited supra, no tea 

•• Clark V. Pendleton, 20 Conn. 495; Short ▼. Stotts, 58 Ind. 29; Blackbnrr 
r. Mann. 85 III. 222 ; Lewis v. Tapman. 90 Md. 294. 45 Atl. 459. 47 Lu R. y 



90 8TATUTB or FRAUDS (Ch. 4 

a marriag^e actually taking place, such as promises to pay money, 
or to make a settlement of property, if the marriage is consummat- 
ed.** An agreement between a man and woman that on their mar- 
riage the survivor shall take no interest in the property of the 
other, has been held to be a contract in consideration of marriage.** 
On the other hand, an oral contract between a man and a woman, 
by which the man was to provide for the comfort and support of 
the woman during life, pay her debts, take care of, manage, and 
improve certain land so as to make it productive, and to that end 
that the parties should marry and live together on the land, which 
should be conveyed by the woman to the man in fee simple, was 
held not to be within the statute, on the ground that the consid- 
eration for the conveyance of the land was the provision for the 
support and comfort of the woman, and not the marriage.*** 

The marriage of the parties^is not such j)art performance a s will 
take an antenuptTaT contract out'of't&e operation of the statute.** 

385. "It would be imputing to the legislature too great an absurdity to sup- 
pose that they had enacted that aU our courtships, to be valid, must be in 
writing." Withers v. Richardson, 5 T. B. Mon. (Ky.) 94, 17 Am. Dea 44. 
See "Fmudf, Statute of,*' Deo, Dig. (Key-No,) f S; Cent, Dig. i S. 

•TCaton ▼. Caton, L. R. 1 Gh. App. 137; Ogden v. Ogden, 1 Bland (Md.) 
284; Crane t. Gough, 4 Md. 816; Henry ▼. Henry, 27 Ohio St. 121; Finch ▼. 
^inch, 10 Ohio St. 507 ; Deshon ▼. Wood, 148 Mass. 132, 19 N. B. 1, 1 L. a A. 
518; Chase t. Fitz, 132 Mass. 359; McAnnulty ▼. McAnnulty, 120 lU. 26, 11 N. B. 
887, 60 Am. Rep. 552 ; Richardson v. Richardson, 148 111. 563, 36 N. B. 608, 26 L. 
R. A. 305 ; Fleuner v. Flenner, 20 Ind. 564 ; Caylor ▼. Roe, 99 Ind. 1 ; Lloyd t. 
Fulton, 91 U. S. 479, 23 L. Ed. 3G3; Frazer ▼. Andrews, 134 lo^, 621, 112 
N. W. 92, 11 Ia R. A. (N. S.) 593, 13 Ann. Cas. 556. A contract by which 
each party is to retain the title to his or her property, and dispose of it as if 
unmarried, is within the statute. Mallory's Adm*rs ▼. Mallory's Adm'r, 92 
Ky. 316, 17 S. W. 737. See **Frauda, Statute of,** Deo. Dig. {Key-No,) §i 4, 5; 
Cent, Dig. U 4, 5. 

ss Carpenter t. Comings, 51 Hun, 638, 4 N. Y. Supp. 947. See, also, Bnnis t. 
Ennis, 48 Hun, 11. So, also, in case of an agreement that certain property 
shall go to the survivor. Hannon y. Hounlhan, 85 Va. 429, 12 S. E. 157. 
And see White v. Bigelow, 154 Masa 593, 28 N. B. 904 ; Adams t. Adams, 17 
Or. 247, 20 Pac 633. See ^'Frauds, Statute of,** Deo, Dig. (Key-No.) H 4, 5; 
Cent. Dig. IS 4, 5. 

*» Larsen v. Johnson, 78 Wis, 300, 47 N. W. 615, 23 Am. St Rep. 404. See 
"Frauds, Statute of,** Dee. Dig. (Key-No.) S§ 4-^; Cent, Dig, H 4-6, 

60 HUNT V. HUNT, 171 N. Y. 396, 64 N. B. 159. 69 L. R. A. 306, Throck- 
morton Cas. Contracts, 66; Hannon v. Hounlhan, 85 Va. 429, 12 S. E. 157. 
And see Johnstone v. Mappin, 60 Law J. Ch. 241; Flenner v. Flenner, 29 
Ind. 564; Manning v. Riley, 52 N. J. Eq. 30, 27 AtL 8ia See "Frauds, Stat- 
ute of,** Deo. Dig. (Key-No.) { 6; Cent. Dig. | 6. 



§ 42) OONTBAGT OB SALE OF LANDS 91 



SAME— CONTRACT OR SALE OP LANDS, OR ANY INTER- 
EST IN OR CONCERNING THEM 

42. The following general rules may be mentioned: 

(a) The contract must be for a aubstantial interest in land. 

(b) Fructus industriales, or crops and other products of land, 

raised by labor and cultivation, are not an interest therein. 

(c) Fructus naturales, or the natural growth and products of 

land, are an interest in land if the ownership is to pass be- 
fore» but not if it is not to pass tmtil after, severance. 

(d) A mere license to enter on land is not an interest in land^ but 

it is otherwise with an easement. 

V*^*'^^^**** ^""^na^Ba^^M ^i*^M^^ a^>M« ^^m^m «■ mt^^^^i^n^' ^Aian^ ^^^ 

The treatment of this clause of the statute belongs more properly 
to a work on the law of real property, and we need only state the 
rules governing its application in a general way. The terms 
"lands," "tenements," and "hereditaments'* have a clearly-defined 
meaning in the law of real property. They are used to denote the 
subjects of real property, as distinguished from personal property, 
or goods and chattels. It is often difficult, however, to determine 
what is an interest in land within this section. 

A contract, to require writing as being for an interest in land, 
must be for a substantial interest, and not for arrangements prelim- 
inary to the acquisition of an interest, nor for a remote and inappre- 
ciable interest.*^ An agreement for a lease of land would be a con- 



•1 Watters t. McGuigan, 72 Wla 155, 39 N. W. 382. It has been held that 
where two ezeciition creditors levy on the same land, and then agree that 
it shall be sold under one of the executions, and the proceeds divided, this is 
not a sale, but k compromise, and therefore not within the statute. Mygatt 
T. Tarbell, 78 Wis. 351, 47 N. W. 61& An agreement by an heir with his 
ancestor to release his expectations is within the statute. Brands ▼. De 
Witt, 44 N. J. Eq. 545, 10 Ati. 181, 14 Atl. 894, 6 Am. St Rep. 909. So, also, 
Is an agreement by a vendee under an executory contract of sale to surrender 
to his vendor his Interest under the contract Dougherty v. Catlett, 129 111. 
431, 21 N. E. 932. An agreement, on the sale of land, for abatement of price 
in case of a deficiency, is not within the statute. McGee t. Craven, 106 N. G. 
351, 11 S. E. 375; Havlland v. Sammis, 62 Conn. 44, 25 AtL 394, 36 Am. St 
Rep. 330. Nor is an agreement by which a party promises to pay another a 
certain sum per acre for all the land the latter shall examine and advise the 
former to buy. Wilson v. Morton, 85 Cal. 598, 24 Paa 784. Agreement be- 
tween adjoining landowners as to building of partition fence. Rudlsill v. 
Cross, 54 Ark. 519, 16 S. W. 575, 26 Am. St Rep. 57. Oral agreement to ar- 
bitrate as to land. Fort v. Allen, 110 N. C. 183, 14 S. E. 685. Rent being an 
Incident to the ownership of land, an assignment of rent must be in writing. 
King T. Kaiser, 3 Misc. Rep. 523, 23 N. Y. Supp. 21. Agreement to devise 
land. Gould v. Mansfield, 103 Mass. 408, 4 Am. Rep. 678; Hale v. Hale, 90 



92 8TATUTB OF FRAUDS (Ch. 4 

tract for an interest in land,** but an agreement to pay for an ex- 
amination of title with a view to purchasing land, or to furnish 
another with money with which td buy land would not be within 
the statute,** nor would an agreement to transfer shares of stock in 
a railroad company or other corporation, which, though the com- 
pany may own land, do not give any appreciable interest therein to 
the individual shareholders.** According to the better rule, which 
is also supported by the weight of authority, an oral contract be- 
tween adjoining landowners, settling a doubt or dispute as to the 
boundary line between them, is not within the statute.** 

The contrary has been held, however,** and where the purpose 
of the contract is not to settle the existing boundary, but to effect 
a transfer of land, it is within the statute.*^ 

An agreement between lan<dlord and tenant for the sale or sur- 

Va. 728, 19 S. B. 739 ; In re Kessler's Estate, 87 Wis. 660, 69 N. W. 129, 41 
Am. St Rep. 74 ; Grant ▼. Grant, 63 Conn. 630, 29 Atl. 16, 38 Am. St Rep. 
879. See **PraudM, Statute of,** Deo, Dig. (Key-No.) f 56; Cent. Dig. H 85- 
89, 1S6-1S8. 

•* Potter T. Arnold, 15 R. I. 360, 6 Atl. 879. Assignment of a lease the 
nnezpired term ot which is more than a year. Chicago Attachment Co. v. 
Davis Sewlng-Mach. Co. (111. Sup.) 26 N. E. 669, 28 N. E. 959; Id., 142 IH. 
171, 31 N. E. 438, 15 L. R. A. 764. Bee '^Frauds, Statute of;* Dee. Dig. (Key- 
Jfo.) § 58; Cent. Dig. (S 90, 91. 

«» Homer ▼. Frazler, 66 Md. 1, 4 Atl. 133. An agreement by an agent to 
buy land In his own name for the benefit bf his principal is not within the 
statute. BaKer v. Wainwright, 36 Md. 336, 11 Am. Rep. 495. A parol parti- 
tion is not within the statute. Meacham t. Meacham, 91 Tenn. 532, 19 S. 
W. 757; Wolf v. Wolf, 158 Pa. 621, 28 Ati. 164. Contra: Fort ▼. Allen, 110 
N. C. 183, 14 S. E. 685. Nor is an agreement not to use land for a particular 
purpose. Hall v. Solomon, 61 Conn. 476, 23 Atl. 876, 29 Am. St Rep. 218. 
See *'Praud8, Statute of,"* Dee. Dig. (Key-No.) i 56; Cent. Dig. {f 83-89, 1S6- 
1S8. 

«* Anson, Cont (4th Ed.) 61. But see Driver t. Broad, 4 Reports 411; Id. 
[1893] 1 Q. B. 744. See **Fraud8, Statute of/* Dee. Dig. (Key-No.) i 56; Cent, 
Dig. §§ 83-89, 136-188. 

•5 Jenkins v. Trager (C. C.) 40 Fed. 726; Archer y. Helm, 09 Miss, 730, 11 
South. 3; Ferguson v. Crick (Ky.) 23 S. W. 668; Lecomie v. Toudouze, 82 
Tex. 208, 17 S. W. 1047, 27 Am. St Rep. 870; Grigsby v. Combs (Ky.) 21 S. W. 
37; Jacobs v. Moseley, 91 Mo. 457, 4 S. W. 135; Sheets v. Sweeny, 136 111. 
336, 26 N. E. 648 ; Atchison t. Pease, 96 Mo. 666, 10 S. W. 159 ; Hills v. Lud wig, 
46 Ohio St 373, 24 N. E. 596; Patterson v. Meyer, 28 Okl. 304, 114 Pac. 256; 
Teass v. City of St Albans, 38 W. Va. 1, 17 S. E. 400, 19 L. R. A. 802. As to 
ratification of an agreement, see Cavanaugh ▼. Jackson, 91 Cal. 580, 27 Pac. 
931. See '^Frauds, Statute of," Dec, Dig, (Key-No.) § 70; Cent. Dig. f 112, 

•• Camp V. Camp, 59 Vt 667, 10 Aa 748. See *'Fraude, Statute of," Dec, 
Dig. (Key-No,) S 70/ Cent. Dig. S 112, 

•T Weeks ▼. Martin, 57 Hun, 689, 10 N. Y. Supp. 056; Jenkins v. Trager 
(C. C.) 40 Fed. 726; Shaffer v. Hahn, 111 N. C. 1. 15 S. B. 1033; Buckner v. 
Anderson, 111 N. O. 572, 16 S. R 424 ; Mann y, Mann, 152 CJaL 23, 91 Pac. 
994. See "Frauds, Statute of;* Dec. Dig. (Key-No.) ^ 70; Cent. Dig. i 112. 



/ 

t 



• . . / ' 



• 

• -' -' ^^ / 

fi 42) OONTBAOT OB 8ALB OF LANDS 98 

render of fixtuiies placed upon the land by the tenant is not a sale 
of an interest in land.** 

According to the weight of authority, agreements for partner- 
ship dealings in land — that is, agreements under which the parties 
are to buy land for the purpose of selling it again, and dividing the 
profits or losses — ^are not within the statute.** So the appointment ^ 

of an agent to sell land need not be in writing.^* /v\^/ /^2^- .^-v. c/o 

Crops and Other Products of Land 

Probably the chief question of interest with reference to this sub- 
ject relates to the sale of crops and other products of land. A dis- 

•» South Baltimore Co. t. Mulilbach, 69 Md. 895, 16 AU. 117, 1 L. R. A. 
607; Frear t. Hardenbergh, 6 Johns. (N. Y.) 272, 4 Am. Dec. 350; Scoggin 
T. Slater, 22 Ala. 687; Heysham 4r. Dettre, 89 Pa. 506. Nor are they within 
section 17. Hallen t. Runder, 1 C, M. ft R. 266; Lee t. Qaskell, 1 Q. B. D. 
700. Bee ""Fraudi, Statute of,"* Deo. Dig. {Kep-No.) | 7S; Cent. Dig, ff 116-' 
118. 

•• McElroy t. Swope (C. C.) 47 Fed. 380; Petrle t. Torrent, 88 Mich. 43, 49 
N. W. 1076; Ho^PT^n y. Kelly, 149 Pa. 473, 24 Atl. 224; Gardner ▼. Randell, 
70 Tex. 453, 7 S. W. 781 ; Von Trotha y. Bamberger, 15 Colo. 1, 24 Pac. 883 ; 
Flower v. Bamekoff, 20 Or. 132, 25 Paa 870, 11 L. R. A. 149; Speyer y. 
Desjardins, 144 111. 641, 82 N. £3. 283, 36 Am. St Rep. 473 ; Fountain y. Me- 
nard, 53 Minn. 443, 55 N. W. 601, 39 Am. St Rep. 617 ; Bates y. Babcock, 95 — — vL . • 
CaL 479, 30 Paa 605, 16 L. R. A. 745, 29 Am. St Rep. 133; Case y. Seger, 4 ^-. 

Wash. 492, 30 Pac. 646 ; Coffin y. Mcintosh, 9 Utah, 315, 34 Pac. 247. But see 
Young y. Wheeler (C^ C.) 34 Fed. 98; Raub y. Smith, 61 Mich. 543, 28 N. 
W. 678^ 1 Am. St Rep. 619 ; Brosnan y. McKee, 68 Mich. 454, 30 N. W. 107 ; 
McKinnon y. McKinnon (a C.) 46 Fed. 713 ; Clarke y. McAuliflTe, 81 Wis. 104, 
51 N. W. 83. An agreement between A. and B. to work a stone quarry to- 
gether, and diyide the profits, if B. can purchase land, to be paid for by 
A., to whom the deed is to be made, is not for an Interest in land. Treat 
y. Hiles. 6S Wis. 844, 32 N. W. 517, 60 Am. Rep. 858. But a contract by which 
two persons are to buy land and cultiyate it on their joint account, applying 
the net proceeds to the payment of the purchase money, and when the land 
Is paid for to own it as tenants in common, has been held within the statute. 
Wiley y. Wiley, 115 Md. 646, 81 Atl. 180, Ann. Cas. 1913A, 789. An agreement 
by a person to purchase land with his own money, and diyide with another, 
is within the statute. Towle y. Wads worth, 147 111. 80, 30 N. B. 602, 35 N. E. 
73; Bobbins y. Kimball, 55 Ark. 414, 18 S. W. 457, 29 Am. St Rep. 45; 
Mor(on y. Nelson, 145 111. 586, 32 N. E. 916 ; Roughton y. Rawllngs, S& Ga. 819, 
16 S. E. 89; Schultz y. Waldons. 60 N. J. Eq. 71, 47 Atl. 187. And see, further, 
as to what constitutes partnership dealings in lands. Nester y. Sullivan, - 
147 Mich. 493, 111 N. W. 85, 1033, 9 L. R. A. (N. S.) 1106; Norton y. Brink, 
75 Neb. 566, 106 N. W. 668, 110 N. W. 669, 7 I* R. A. (N. S.) 945, 121 Am. 
St Rep, 822; Scheuer y. Cochem, 126 Wis. 209, 105 N..W. 573, 4 L. R. A. 
(N. S.) 427, and note. Bee ''Frauds, Statute of,*' Dec big, (Key-No.) ^ 76; 
Cent. Dig, {{ 1S5-1S9, 

"ToLong y. Hartwell, 34 N. J. Law, 116; Johnson y. Dodge, 17 III. 433; 
Kempner y. Gans, 87 Ark. 221, 111 S. W. 1123. 112 S. W. 1087. Bee **Fraud8, 
Statute of,** Dec, Dig, (Key-^o,) §f 74, 116; Cent. Dig. i§ IZt^lSt, 251-260; 
'^Principal und Agent,** Cent. Dig. { S80. 



94 STATUTE or riiAUDS (Ch. 4 

tinction exists between what are called "fructus indcistriales/' such 
as crops of wheat, com, and the like, which are obtained by labor 
and cultivation, and "fructus naturales," such as growing grass, 
timber, ores in the ground, and the like, produced by the power of 
nature alone. 

Fructus industriales are chattels, 'and not an interest in land;** 
and this is true whether the crops are growing, or, having matured, 
have ceased to draw any nutriment from the soil.'* 

Fructus naturales, on the contrary, are such an interest, and a 
contract for their sale, which contemplates the passing of the propr 
erty before the severance, is within the statute ; '• but it is otherwise 
if the title is not to pass until after they arc severed.'* 

Licenses and Easements 

A mere license to enter upon land and do a particular act or series 
of acts — as in the case of a license to enter upon land and remove 
property sold to the licensee— ^is not an interest in land, within the 
statute. It is otherwise, however, where the right conferred is to 
enter u^on lands and erect and maintain a 'dam thereon. This is 

71 Evans v. Roberts, 5 Bnm. & 0. 829; Jones t. Flint, 10 Adol. A El. 753; 
Miller T. Baker, 1 Mete. (Mass.) 27 ; Wliitmarsh ▼. Walker, Id. 313 ; Whipple 
V. Foot, 2 Johns. (N. Y.) 41S» 3 Am. Dec. 442; Ross v. Welch, 11 Gray (Mass.) 
235; Northern t. State, 1 Ind. 113; Graff v. Fitch, 58 111. 373, 11 Am. Rep. 85; 
Davis V. McFarlane, 37 Cal. 634, 99 Am. Dec. 340 ; Marshall v. Ferguson, 23 
Cal. 65 ; Pumer t. Plercy, 40 Md. 223, 17 Am. Rep. 591. But see, contra, Kerr ▼. 
Hill, 27 W. Va. 576. See ^'Frauds, Statute of,*" Deo. Dig. {Key-No.) f 72; 
Cent. Dig. §§ 416-118. 

T« Turner v. Morris, 142 Mo. App. 60, 125 S. W. 238. Bee '*Fraud8, Statute 
of," Dec. Dig. (Key-No.) f 73; Cent. Dig. §§ 116-118. 

Ti Rodwell V. Phillips, 9 Mees. & W. 501 ; Crosby ▼. Wadsworth, 6 East 
602; White v. Foster, 102 Mass. 375; Howe v. Batchelder, 49 N. H. 204; 
GREEN V. ARMSTRONG, 1 Denlo (N. Y.) 550, Throckmorton Gas. Contracts, 
69; Harrell v. MUler. 35 Miss. 700, 72 Am. Dec. 154; Owens v. Lewis, 46 Ind. 
489, 15 Am. Rep. 295; LllUe v. Dunbar, 62 Wis. 198, 22 N. W. 467; Hlrth 
V. Graham, 50 Ohio St 57, 33 N. E. 90, 19 U R. A. 721. 40 Am. St Rep. 641 ; 
Ives V. Atlantic & N. C. R. Co., 142 N. C. 131, 55 S. B. 74, 115 Am. St Rep. 
732, 9 Ann. Cas. 188, and note; Childers T. Wm. H. Coleman Co., 122 Tenn. 

109. 118 s. w. loia 

There is, however, much conflict, and In some states sales of Rowing trees, 
to be presently cut and removed by the purchaser, are held not to be within 
this section. Bostwick v. I^ach, 8 Day (Conn.) 476; Smith v. Bryan. 6 Md. 
141, 59 Am. Dec 104 ; Leonard v. Medford, 85 Md. 666, 37 Atl. 365, 37 L. R. 
A. 449; cf. Marshall v. Green, 1 C. P. D. 35. See Tiffany, Sales, 46. See 
'^Frauds, Statute of,** Dec. Dig. (Key-No.) S 72; Cent. Dig. {§ 116-118. 

T 4 Smith V. Surman, 5 B. C. 561; Washbourn v. Burrows, 11 East 362; 
Drake v. Wells, 11 Allen (Mass.) 141 ; Fletcher v. Livingston, 153 .Afass. 388, 
26 N. E. 1001; Banton v. Shoiey, 77 Me. 48; Upson v. Holmes, 51 Conn. 500; 
KlUmore v. Howlett, 48 N. Y. 509. See ''Frauds, Statute of,** Deo. Dig. (Key- 
No.) i 72; Cent. Dig. {| 116-118. 




§ 43) AQHECMBNX NOT TO BE FBBFOBMBD WITHIN TEAB 96 

more than a mere license; it is an easement It is the transfer of 
an interest in the land.'* A right of way is an interest in l and. '* 

Statutes Varying from the English Statute 

The statute in some states varies from the English statute. In 
Illinois, for instance, it applies to any contract for the sale of lands, 
etc., or any interest in or concerning them, "for a longer term than 
one year." '' And in other states it applies only to contracts for the 
sale of lands or for the lease thereof for a longer term than one 
year.'* 



SAME— AGREEMENT NOT TO BE PERFORMED WITHIN 

ONE YEAR 

• 

43. The following rules may be mentioned: 

(a) The agreement must be impossible of performance within 

the year. 

(b) In some jurisdictions the agreement must contemplate non- 

performance by both parties within the year. 

(c) In a few jurisdictions this clause of the statute does not ap- 

ply to agreements relating to land. 

Possibility of Performance 

If, upoii a reasonable construction of the contract, it appears to 
have been understood by the parties that it was not to be perform- 
ed within the year, it is within the statute.'* In order that an 

Ti See Mumford t. Whitney, 15 Wend. (N. Y.) 380, 80 Am. Dec. 60. In the 
case dted the authorities are collected -and discussed at length. See, also, 
Whltmarsh ▼. Walker, 1 Mete. (Mass.) 313; Johnson v. Wilkinson, 139 Mass. 
8^ 29 N. E. 62, 52 Am. Rep. 698; Tayler t. Waters, T Taunt 374; Hayes v. 
/^Flne, 91 Cal. 391, 27 Pac. 772; Qanton ▼. Scruggs, 95 Ala. 279, 10 South. 
/ 757. Easement in portion of the water from a ditch. Dorris ▼. Sullivan, 
^ ^,M CaL 279, 27 Pae. 216. Agreement between railroads for Joint use of the 
right of way of one not within the statute. Alabama Q. S. R. Co. y. Rail- 
road Co., 84 Ala. 570, 8 South. 286, 5 AnL St Rep. 401. Nor is an agree- 
ment between telegraph companies- for the use by one of the other's poles. 
Famsworth v. Telegraph Co., 53 Hun, 636, 6 N. Y. Supp. 735. A right to 
drain water over another's land is said to be an interest in land. Deyo 
T. Ferris, 22 111. App. 154; Id., 24 111. App. 416. Be^ "Frauds, Statute of," 
Deo. Dig. (Key-No.) fi§ 60, 61; Cent. Dig. S§ 88-96. 

v« Bonelli ▼. Blakemore, 06 Miss. 130, 5 South. 228^ 14 Am. St Rep. 550. 
Bee ^'Frauds, Statute of,'' Dec. Dig. (Key-No.) §f 60, 61; Cent. Dig. {{ ^8-96. 

TT Rey. St 111. c. 59, § 2. 

v« Virginia and Kentucky. 

ft White y. Fitts, 102 Me. 240, 66 AtL 638, 15 L. R. A. (N. S.) 813, 120 Am. 
St Rep. 488. Bee '^Frauds, Statute of,*' Deo. Dig. (Key-No.) i 46; Cent. Dig. 
I 72. 



06 ITATUTB or FRAUDS (C3l. 4 

agreement may fall within this clause of the statute, however, the 
parties must contemplate that it shall not be performed within a 
year. The mefe fact that it may not be, or is not, performed within 
the year, does not bring it within the statute. It must appear, it 
has been said, that "it is to be performed after the year." •• Further 
than this, the agreement must be impossible of completion within a 
year. If, by any possibility, it is capable of being completed with- 
in a year, it is not within the statute, though the parties may intend, 
and though it is probable, that it will extend over a longer period, 
and though it does in fact so extend. 

The oral contracts that have been held enforceable under this 
rule may be classified as follows : 

(a) Agreements for the performance of an act on the happening 
of a contingency which may possibly happen within a year — as in 
the case of agreements to do something on the marriage or death 
of a person, without further specification as to time; or upon the 
return of a ship, which may return within a year, though it does not 
in fact return until a longer time has elapsed ; or upon the happen- 
ing of any other event which may happen at any time.** 

(b) Agreements for the continuous performance of acts until the 
happening of a contingency which may possibly happen within a 
year, — as in the case of agreements to render services, or to support 
a person, or to pay money from time to time, during a person's life, 
or until a person's marriage, or until the happening of any other 

»• Peter ▼. Compton, 1 Smith, Lead. Caa. 835 ; DOYLE ▼. DIXON, 97 Mass. 
208, 03 Am. Dec. 80, Throckmorton Cas. Contracts, 72; Warner t. Railway 
Co., 164 U. S. 418, 17 Sup. Ct 147, 41 L. Ed. 405; Bullock v. Turnpike Co., 
85 Ky. 184, 3 S. W. 129 ; Worley v. Sipe, 111 Ind. 238, 12 N. B. 385 ; Jones 
T. Pouch, 41 Ohio St 146; Roynor ▼. Drew, 72 Cal. 307, 13 Pac. 866; Sarles 
V. Sharlow, 5 Dak. 100, 37 N. W. 748; Warren Chemical & Mfg. Co. T. Hol- 
brook, 118 N. Y. 586, 23 N. B. 908, 16 Am. St Rep. 788; Durham v. Hlatt, 
127 Ind. 514, 26 N. E. 401 ; Sweet v. Lumber Co., 66 Ark. 629, 20 S. W. 614 ; 
Niagara Fire Ins. Co. v. Greene, 77 Ind. 590; Cole v. Slngerly, 60 Md. 348; 
MacElree v. Wolfersberger, 59 Kan. 105, 52 Pac. 69; Richmond Union Pass. 
R. V. Railroad Co., 96 Va. 670, 82 S. B. 787. See **Praud9y Statute of" Deo. 
Dig. (Key-No.) {! 49, 50, 52; Cent. Dig. %% 74-7P. 

a I Kent v. Kent, 62 N. Y. 560, 20 Am. Rep. 502; JUson ▼. Gilbert, 26 Wis. 
637, 7 Am. Rep. 100; Updike t. Ten Broeck, 82 N. J. Law, 105; Anonymous, 
1 Salk. 280; Blake v. Cole, 22 Pick. (Mass.) 97; McPherson ▼. Cox, 96 U. S. 
404, 24 L. Ed. 746; Cole y. Slngerly, 60 Md. 348; Thomas ▼. Armstrong, 86 
Va. 323, 10 S. E. 6, 5 L. R. A. 529; Bartlett v. Mystic River Corp., 151 Mass. 
433, 24 N. B. 780; Clark v. Pendleton, 20 Conn. 495. A promise by a man to 
marry when he recovers his health, McConahey t. Griffey, 82 Iowa, 664, 48 
N. W. 983 ; or when he returns from a voyage from which he may or may not 
return within a year, Clark v. Pendleton, 20 Conn. 495 — ^la not within the 
statute. Bee **Prauda, Statute of," Deo. Dig. {Key-No.) i 50; Cent. Dig. fi 
75-77. 



I 43) AGBBBMENT NOT TO BS PBRFOBMED WITHIN TBAB 97 

event which may possibly happen within a year.*' In this class 
may be placed contracts that may be terminated at any time on 
notice, and contracts to perform acts so long as the other part^ 
may need such performance.** 

(c) Agreements which, from their nature, and without mention- 
ing any contingency, will be completely performed according to 
their terms and intention if a certain contingency shall happen 
within the year** — as in the case of agreements to forbear from 
personally doing certain acts for an indefinite time, or for a number 
of years, and which would be fully performed if the promisor should 
die within the year ; ** or of agreements to educate or support a 

•s Kent ▼. Kent, 62 N. Y. 660, 20 Am. Rep. 602 ; Heath t. Heath, 81 Wis. 
223; Carr t. McCarthy, 70 Mich. 258, 38 N. W. 241; BeU v. Hewitfs Ex'rs, 
24 Ind. 280; Harper ▼. Harper, 67 Ind. 647; McGregor t. McGregor, L. R. 
21 Q. B. DlT. 424; Dresser ▼. Dresser, 86 Barb. (N. Y.) 673; Hutchinson ▼. 
Hutchinson, 46 Me. 164 ; Atchison, T. ft & F. R. Ck>. t. English, 88 Kan. 110, 
16 Pac. 82; East Line ft R. R. R. Ck>. t. Scott, 71 Tez. 708, 10 S. W. 298, 
10 Am. St Rep. 804; Stowers y. Hollis, 83 K7. 644; Dailey t. Cain (Ky.) 18 
S. W. 424. Nor is an agreement to work for a company **for the term of five 
years, or so long as A. shall continue to be agent for the company." Roberts 
▼. Rockbottom Co., 7 Mete. (Mass.) 46. Nor an agreement to employ a person 
•o long as he may be disabled from an injury which he has received. EtLBt 
Tennessee, V. ft G. R. Ca ▼. Staub, 7 Lea (Tenn.) 897. See **Fraud4, Statute 
o/," Dec. Dig. (Key-No.) fi 49-^2; Cent. Dig. H 7^7P. 

••First Baptist Church t. Insurance Co., 19 N. Y. 806; Roberts t. Rock- 
bottom Co., 7 Mete (Mass.) 46; Walker ▼. Railroad Co., 26 S. C. 80, 1 S. E. 
866; Blake v. Yoight, 11 N. Y. Supp. 716; Id., 184 N. Y. 69, ai N. E. 266, 80 
Am. St Rep. 622; Johnston ▼. Bowersock, 62 Kan. 148, 61 Paa 740. Contra: 
Dobson T. CoUis, 1 H. ft N. 81 ; Blest v. Shoe <3o., 97 Mo. 187, 70 S. W. 1081. 
See "Frauds, Statute of," Deo. Dig. (Key-No.) §t 49^2; Cent. Dig. if 7^-7^. 

s4 An agreement by a railroad company to maintain cattle guards in con- 
sideration of a right of way is not within the statute, since it may cease to 
use the right of way before expiration of a year. Arkansas M. R. Co. ▼. 
Whitley, 64 Ark. 199, 16 S. W. 466, 11 L. R. A. 621. A parol contract of 
partnership, without any fixed time for continuance, and the business of 
which may be completed within a year, is not within the statute. Jordan ▼. 
Miller, 76 Va. 442 ; Treat t. HUes, 68 Wis. 344, 32 N. W. 617, 60 Am. Rep. 
868. It is otherwise if the partnership is to be continued beyond a year. 
Wahl T. Bamum, 116 N. Y. 87, 22 N. E. 280, 6 L. R. A. 623. And see, on the 
rule stated in the text, Frazer y. Gates, 118 IlL 99, 1 N. £. 817; Dailey ▼. 
Cain (Ky.) 13 S. W. 424; Great Western Turnpike Co. ▼. Shafer, 67 App. 
Div. 331, 68 N. Y. Supp. 8. See "Frauds, Statute of,** Deo. Dig. (Key-No.) 
i 50; Cent. Dig. U 75-77. 

•6 Under this rule it has been repeatedly held that an agreement not to 
carry on a certain business at a particular place was not within the statute, 
''because, being only a personal engagement to forbear doing certain acts, 
not stipulating for anything beyond the promisor's life, and imposing no du- 
ties upon his personal representativee, it would be fully performed if he died 
within the year." DOYLE t. DIXON, 97 Mass. 208, 93 Am. Dec. 80, Throck- 
morton Cas. Contracts, 72; Lyon t. King, 11 Mete (Mass.) 4XU 46 Am. Dec. 

GiABK Cont.(3d Ed.)— 7 



98 8TATUTB OF FRAUDS (Ch. 4 

child until a certain age, at which he will not arrive for several 
years, or for an indefinite time, and which would be completely per- 
formed if the child should die within the year/* The agreement, 
to come within this class, must be such that it will be fully "per- 
formed" on the happening of the contingency, and not merely 
terminated. If it cannot be fully performed within the year, the 
fact that it may be terminated, or that further performance may be 
excused or rendered impossible, is not sufficient to take it out of 
the statute.*^ And this is true even thotigh the contract contains a 
provision by which either party may terminate it, within a year.** 
(d) Agreements which fix no definite time for their performance, 

219; Worthy ▼. Jones, 11 Gray (Mass.) 168^' 71 Am. Dee. 696; Hm ▼. Jamieson, 
16 Ind. 125, 79 Am. Dec. 414 ; Richardson y. Pierce, 7 B. I. 830. And It is im- 
material in such cases that the agreement specifies that the promisor is to 
forbear for a certain number of years. DOYLE y. DIXON, supra. See 
**Fraud9, Btatute of," Dec. Dig, (Key-No,) i SO; Cent. Dig. §f 75-77. 

••Peters y. Westborough, 19 Pick. (Mass.) 364, 31 Am. Dec. 142; Elllcott 
y. Turner, 4 Md. 476; Wooldridge y. Stern (C. C.) 42 Fed. 811, 9 L. a A. 
129; Taylor y. Deseye, 81 Tex. 246, 16 S. W. 1008. See^ also, Pennsylyania 
Ck>. y. Dolan, 6 Ind. App. 109, 32 N. B. 802, 51 Am. St Rep. 289; Carnlg y. 
Carr, 167 Mass. 544, 46 N. E. 117, 85 L. R. A. 612, 57 Am. St Rep. 488 ; Yellow 
Poplar Lumber Co. y. Rule, 106 Ky. 455, 50 S. W. 685 ; Sax y. Railway Co., 125 
Mich. 252, 84 N. W. 314, 84 Am. St Rep. 572; Martin y. Batchelder, 69 N. H. 
360, 41 AtL 83 (to keep house for year). Bee "FraiuU, Statute of,'* Deo. Dig- 
{Key-mo.) f 50; Cent. Dig. §§ 75-77. 

»r DOYLE y. DIXON, supra. For this reason it has been held that an 
Agreement to employ a boy for flye years, and to pay his father certain sums 
at stated periods during that time, was within the statute; for though, by 
the death of the boy, the seryices which were the consideration of the 
promise would cease, and the promise therefore be determined, it would not 
be completely performed. Hill y. Hooper, 1 Gray (Mass.) 131. And see 
Washington, A. & G. Steam Packet Co. y. Sickles, 5 Wall. 580, 18 L. Bd. 550 
(Cf. Warner y. Railway Co.,- 164 U. S. 418, 17 Sup. Ct 147, 41 L. Ed. 495, 
criticising this case). And so, according to the weigh! of authority, an agree- 
ment for personal seryices for a period of more than one year is \within the 
statute, for, on the death of either party, it would be terminated, and not 
fully performed. Williams y. Bemis, 108 Mass. 91, 11 Am. Rep. 318; Lee*8 
Adm'r y. Hill, 87 Va. 497, 12 S. E. 1052, 24 Am. St Rep. 666; Day y: Railroad 
Co., 51 N. Y. 583, 590; Haynes y. Mason, 30 111. App. 85; William Butcher 
Steel Works y. Atkinson, 68 111. 421, 18 Am. Rep. 560; Chase y. Hinkley, 126 
Wis. 75, 105 N. W. 230, 2 L. R. A. (N. S.) 738, 110 Am. St Rep. 896, 5 Ann. 
Cas. 328. In such cases, where the employ^ is discharged or quits the em- 
ployment, after part performance, he may recoyer for what he has done, not 
on the contract, but on an implied assumpsit Cases cited supra; Baker y. 
Lauterbach, 68 Md. 64, 11 Atl. 703. See, also, post, p.ll9. If the term of 
employment is indefinite, the contract is not within the statute. See, also, 
Dobson y. Collis, 1 Hurl. & N. 81. See ''Frauds, Statute of,'' Deo. Dig. (Key- 
No.) I 50; Cent, Dig. fi§ 75-77. 

' ssWagniere y. Dunnell, 29 R. I. 580, 73 AU. 809, 17 Ann. Cas. 205. See 
*'Fraud9, Statute of;* Dec. Dig. (Key-No.) | 61; Cent. Dig. | 78. 



§ 43) AOREEMENT NOT TO BE FEBFORMBD WTTBIJS TEAB 99 

but which, in view of the subject-matter and of the understanding 
of the parties, may be fully performed within a year; ■• as an agree- 
ment for the making and gathering of a crop which may be made 
within a year, although a longer time is usually required.** 

(e) Agreements of which performance may be required within 
a year if either party so chooses, though neither intends to require 
performance, and neither in fact requires it, until after expiration 
of the year.*^ 

Part Performance within a Year 

Another rule, which is established in England and in most of our 
states, is that an agreement does not fall within the statute if that 
which one of the parties is to do is all to be performed within a 
year; in other words, the agreement must contemplate nonperform- 
ance by both parties within the year.*" A part pe r formance by one 
of the parties, however, will not tak e the agree ment out of the stat- 
ute.** 

Some of the states, however, have refused to recognize this rule, 
and hold that, even though all that is to be done by one of the par- 
ties is to be fully done within a year, the agreement is nevertheless 
within the statute, if the other party's promise is not £b be perforrii- 

•• Thomas v. Groom, 102 Ark. 108, 143 S. W. Sa Bee *^raud9, Statute of," 
Dec. Dig. (Key-No,) S 49; Cent Dig. § 7-^ 

t# VaUey Planting Co. ▼. Wise, 93 Ark. 1, 123 S. W. 768, 28 L. R. A. (N. 8.) 
403. Bee "Frauds, Statute of," Dec. Dig. (Key-No.) { 49; Cent. Dig. { 7^. 

•1 Haussman v. Burntaam, 59 Gk)nn. 117, 22 Atl. 1065, 21 Am. St Rep. 74; 
Seddon y. Rosenbaam, 85 Va. 928, 9 8. B. 326, 8 L. R. A. 337; Walker t. 
Johnson, 96 U. 8. 424, 24 L. Ed. 834; ConnoHy t. Glddings, 24 Neb. 131, 87 
N. W. 939. A contract intended to be performed within a year is not within 
the statute, though before the year expires it is extended six months. Ward 
T. Matthews, 73 Cal. 13, 14 Paci 604 ; Donovan v. Richmond, 61 Mich. 467, 28 
N. W. 516. A written lease for more than a year, but with less than a year 
to run, may be modified by parol. Doherty v. Doe, 18 Colo. 456, 33 Pac. 165. 
See ''Frauds, Statute of," Dec. Dig. (Key-No.) { 45; Cent. Dig. §S 67-7i. 

•s Donellan v. Read, 3 Barn. A Adol. 899 ; Homer v. Frazier, 65 Md. 1, 4 
Atl. 133; Blanding v. Sargent, 83 N. H. 239, 66 Am. Dec 720; Winters t. 
Cherry, 78 Mo. 344; Smalley ▼. Greene, 52 Iowa, 241, 3 N. W. 78, 35 Am. 
< Rep. 267 ; Durf ee v. O'Brien, 16 R. I. 213, 14 Atl. 857 ; Dant t. Head, 90 Ky. 
255, 13 8. W. 1073, 29 Am. St Rep. 369; Berry v. Doremus, 30 N. J. Law, 399; 
Piper T. Fosher, 121 Ind. 407, 23 N. E. 269; Grace v. Lynch, 80 Wla 166^ 49 
' N. W. 751; Curtis v. Sage, 35 IlL 22; Langan v. Iverson, 78 Minn. 299, 60 
N. W. 1051 ;. Washburn v. Dosch, 68 Wis. 436, 32 N. W. 551, 60 Am. Rep. 873. 
See "Frauds, Statute of," Deo. Dig. (Key-No.) §§ 5i, 1S6; Cent. Dig. fS 81, SOO. 

••See Osborne t. Kimball, 41 Kan. 187, 21 Pac. 163; Shumate ▼. Farlow, 
125 Ind. 359, 25 N. E. 432; Baker t. Codding, 18 N. Y. Supp. 159; Hartwell 
T. Young, 67 Hun, 472, 22 N. Y. Supp. 480 ; Chase ▼. Hinkley, 126 Wis. 75, 106 
N. W. 230, 2 L. R. A. (N. S.) 738, 110 Am. St Rep. 896, 5 Ann. Ca& 32& See 
"Frauds, Statute of," Deo. Dig. (Key-No.) | 136; Cent. Dig. i 300. 



IM 8TATUTB X>F FRAUDS (Ch. 4 

ed within the year ; *^ and in these states no recovery can be had 
on the contract by the party who has performed his part, though 
he may sue on the promise implied on the part of the other party 
from his acceptance of the benefits of such performance.*' 

It is held in Illinois that an agreement which is to be fully per- 
formed within the year, except for the mere paymefit of money, is 
not within the statute; the party to whom the money is payable 
having performed on his part.*' 

Particular Contracts 

According to the weight of authority, this clause of the statute 
applies to promises to marry which are, by their terms, to be per- 
formed, after the expiration of a year.*' 

It has>, however, been held in England, and in some of our states, 
that it does not apply to contracts relating to land.** Mr. Browne, 
in his work on the Statute of Frauds, takes the contrary view, and 
says that "it includes all those contracts which are of such duration, 
whatever be their subject-matter." •* We have been unable to 
find any case in which the point seems to have been directly raised 
and decided in accordance with Mr. Browne's statement, but there 
are many cases which assume that the' statute applies to agreements 
relating to Jand. For instance, some courts hold that a parol lease 
for a year, to commence on a future day, is within this clause of 
the statute.^ In some of the states the statute in regard to con- 

•« Whipple ▼. Parker, 29 Mich. 369; Marcy t. Marcy, 9 Allen (Mass.) 8; 
Frary t. SterUng, 99 Mass. 461; Pierce t. Paine's Estate, 28 Vt 84; Sbeehy 
y. Adarene, 41 Vt 541, 98 Am. Dec. 623; Lane t. Shackford, 6 N. H. 130; 
Montague v. Garnett, 8 Bush (Ky.) 297; BroadweU t. Qetman, 2 Denio (N. 
T.) 87; McElroy ▼. Ludlum, 82 N. J. Bq. 828; Jackson Iron Ck>. t. Concen- 
traUng Co., 65 Fed. 298, 12 C. C. A. 686. See ^*Fraud*, Statute of,** Dec. Dig. 
{Key-No.) § 1S6; Cent. Dig, \ SCO. 

»s Whipple T. Parker, 29 Mich. 369. See, also, post, p. 119, note 90; ante, 
p. 18. See **Frauds, Stctute of," Dec. Dig. (Key-No.) §S 129, 1S6; Cent. Dig. 
SI 288 SOO. 

•6 Curtis T. Sage, 85 lU. 22; Worden v. Sharp, 56 IIL 104. See **Fraude, 
Statute of,** Deo. Dig. {Key-No.) S$ 54, 1S6; Cent. Dig. fS 81, SOO. 

•T Derby v. Phelps, 2 N. H. 515; Clark v. Pendleton. 20 Conn. 495; Lawrence 
T. Cooke, 56 Me. 187, 96 Am. Dec. 443 ; Nichols v. Weaver, 7 Kan. 373 ; Lewis 
V. Tappan. 90 Md. 294, 45 Ati. 469. 47 L. R, A, 385. See "Fraudt, Statute of,"* 
Dec. Dig. {Key-No.) § U; Cent. Dig. § 66. 

9B HoUis V. Edwards, 1 Vem. 159 ; Fall t. Hazelregg, 45 Ind. 576, 15 Am. 
Rep 278; Sobey v. Brisbee, 20 Iowa, 105; Young v. Dake, 6 N. Y. 463, 55 
Am. Dec. 356; Wilson v. Martin, 1 Denlo (N. Y.) 602; Rallsback T. Walke, 
81 Ind. 409. See "Frauds, Statute of,** Dec. Dig. (Key-No.) | 44; Cent. Dig. 

tea. 

•• Browne, St Frauds, f 272. ' . 

1 Delano t. Montague, 4 Cush. (Mass.) 42 ; Wheeler v. Frankenthal, T8 HL 
124; Comstock v. Ward, 22 IIL 248; Olt v. Lohnas, 19 IIL 576; RoberU t. 




|§ a-AS) FOBM BEQUIBBD 101 

tracts relating to land excepts from its operation ''leases for a term 
not exceeding one year," and "contracts for the leasing for a period 
not longer than one year/' and in some states it is held that such a 
statute does not apply to agreements for a lease for a year to com- 
mence in the future.* 

A contract for services for one year, to commence at a future day, 
is within the statute,* even though it is to commence on the day 
after the contract is made ; * but it is otherwise if it is to commence 
on the day the contract is entered into.* 





/ 



SAME— FORM REQUIRED /^ / ^^C>y^ 

. CONTENTS OF WRITING. The writing must show: ^ 

(a) The names or descriptions of the parties. 

(b) The terms and subject-matter of the agreement. 

(c) The consideration (in most jurisdictions). 

45. SEPARATE PAPERS. The writing may be on separate 

papers, provided they are all signed by the party to be 
chai'ged or his agent, or that such as are not so signed are 
attached to or referred to in a signed paper. 

46. BY WHOM SIGNED. In most jurisdictions only the signa- / 

ture of the party to be charged is required, but in some ju- / 
risdictions contracts consisting of mutual promises must be/ 
signed by both parties. / 

Tenn^, 8 T. B. Mon. (Ky.) 247; Wilson ▼. Martin, 1 Denlo (N. T.) 602; At- 
wood T. Norton, 81 Ga. 507 ; Strebl ▼. D'Evers, 66 111. 77 ; Jellett y. Rhode, 48 
Minn. 166» 45 N. W. 13, 7 L. R. A. 671 ; White ▼. Holland, 17 Or. 3, 3 Pac 
573 ; BeUer ▼. Deyall, 40 Mo. App. 251 ; White v. Levy, 83 Ala. 484, 9 South. 
164; Cook ▼. Redman, 45 Mo. App. 397. See **Fraud9, Statute of,*' Dee. Dig. 
ifey-No.) f U; Cent Dig. f 66. 

s Whiting y. Ohlert, 52 Mi«h. 462, 18 N. W. 219, 50 Ain. Rep. 265 ; Young 
y. Dake, 5 N. Y. 463, 55 Am. Dec. 356; McCroy y. Toney, 66 Miss. 233, 5 
South. 392, 2 li. R. A. 847 ; Goldberg y. Lavinski, 8 Misc. Rep. 607, 22 N. Y. 
Supp. 552. Contra, Greenwood y. Strother, 91 Ky. 482, 16 S, W. 13& See 
'^Frauds, Statute of,** Deo. Dig. (Keu-No.) f U; Oent. Dig. I 66. 

t BRITAIN y. ROSSITER, Lu R. 11 Q. B. D. 123, Throckmorton Ca& OoJt- 
tracts, 86; Bracegirdle y. Heald, 1 B. & A. 722; Townsend y. Minford, 48 Hun, 
617, 1 N. Y. Supp. 565 ; Lee's Adm'r y. Hill, 87 Va. 497, 12 S. B. 1052, 24 Am. 
St Rep. 666; Baker y. Codding, 18 N. Y. Supp. 159; Chase y. Hlnkley, 126 
Wis. 75, 106 N. W. 230, 2 L. R- A. (N. S.) 738, 110 Am. St Rep. 896, 5 Ann. 
Qbb. 328. See **Frauds, Statute of," Deo. Dig. {Key-No.) f U; Cent. Dig. I 66, 

« BUUngton y. CahiU; 51 Hun, 132, 4 N. Y. Supp. 660. See ^'Frauds, Statute 
of,** Deo. Dig. (Key-No.) S U; Cent. Dig. f 66. 

• Gtewthome y. Cordrey, 13 C. B. N. S. 406 ; 32 L. J. (C. P.) 152 ; Cox y. 
Blowing Co., 68 Hun, 634, 6 N. Y. Supp. 841 ; Aiken y. Nogle, 47 Kan. 96» 27 



102 BTATUTB OF FRAUDS (Ch. 4 

47. HOW SIGNED. The signature may be by mark or initial, 

and, unless the statute requires the name to be ^'subscrib- 
ed/* may be printed, and may be in any part of the writ- 
ing. 

48. AGENT TO SIGN. Where the signature is by agent, the 

agent must be a third person; but a person who acts as 
agent of one person in making the contract may act as 
agent of both in making the memorandum. 

49. DELIVERY. The writing need not be delivered, except it be 

in form of a deed of land. 

Form Merely Evidentiary 

The_^ statute does jnpt jrequire Jhat _the contract itsdf iC-tfidllCPd 
tP. ^Eliti^g' A valid oral contract may exist, but if it is^ within the 
statute of frauds it may not be enforced for the want of written 
evidence by which alone it may be proved.* 

For this reason the memorandum or note may be made at any 
time between the formation of the contract and the commencement 
of an action thereon/ The writing need not be intended as a for- 
mal contract,' nor, in fact, is it required to be in any particular 
form.* AUthatJ^s^re^uired is written evidence pf the agr e eme nt, 
and therefore the memorandum majrjronsist of letters written_by 
t he part y^ t o b e charged to his own agent, or to other third p,er - 
SQns.\® The memorandum may even consist of entries made by the 

Pac. 825 ; Hudglns v. State, 126 Ga. 639, 55 S. E. 492. See "Frauds, Statute 
of," Dec. Dig. (Key-No.) § U; Cent. Dig. § 66. 

• ULLSPERGER y. MEYER, 217 111. 262, 76 N. E. 482, 2 L. R. A. (N. S.) 
221, 3 Ann. Gas. 1032, Throckmorton Gas. Gontracts, 74. See "Frauds, Stat- 
ute of;* Dec. Dig. (Key-No.) §| lOS, 106; Cent. Dig. %% 19S-210. 

T Lemed v. Wannemacher, 9 Allen (Mass.) 412; Gale ▼. Nixon, 6 Gow. 
(N. Y.) 445; Sheehy v. Fulton, 38 Neb. 691, 57 N. W. 395, 41 Am. St -Rep. 
767. But not after the action Is commenced. Bill y. Bament, 9 Mees. & W. 
36; Lucas v. Dixon, 22 Q. B. Dlv. 357; Bird v. Munroe, 66 Me. 337, 22 Am. 
Rep. 571. But see post, p. 103, note 17. It has been held in Illinois that 
an oral agreement in consideration of marriage is not taken out of the statute 
by being reduced to writing after marriage. McAnnuIty t. McAnnulty, 120 
111, 26, 11 N. B. 397, 60 Am. Rep. 652. See "Frauds, Statute of," Dec. Dig. 
(Key-No.) 1 10 i; Cent. Dig. f 209. 

» ULLSPERGER v. MEYER, 217 111. 262, 75 N. B. 482, 2 L. R. A. (N. S.) 221. 
8 Ann. Gas. 1032, Throckmorton Gas. Gontracts, 74. See "Frauds, Statute of,** 
Dec. Dig. (Key-No.) H lOS, 106; Cent. Dig. (§ 192-210. 

• Atwood y. Gobb, 16 Pick. (Mass.) 230, 26 Am. Dec. 657. See "Frauds, Stat- 
ute of;* Dec. Dig. (Key-No.) f lOS; Cent. Dig. S| 192--208. 

10 Gibson ▼. Holland, L. R. 1 G. P. 1; Peabody ▼. Speyers, 56 N. Y. 230: 
Hollis V. Burgess, 37 Kan. 487, 15 Paa 536; Lee v. Gherry, 85 Tenn. 707, 
4 S. W. 835, 4 Am. SL Rep. 800; Cunningham r. WlUiams, 43 Mo. App. 629; 



S§ 44-49) FOBM BEQUIBBD 103 

party to be charged on |iis or his agent's books ; ** and entries in 
the records of a corporation may prove a contract by it." So,, also, 
resolutions of a city council may be a sufficient memorandum of a 
contract by it on behalf of the city.** A telegram may be a suffi- 
cient jnMnorandumjto the party^by 
whom it is ^ent .^* Even recitals in a will have been held sufficient 
evidence of a contract by the testator to answer for the debts of 
his son.** 

A letter repudiating a verbal contract previously made by the 
writer may be sufficient.** Some of the courts seem to hold that 
the admission of an oral contract in the pleadings in an action is a 
sufficient memorandum, but the decisions are no doubt based on 
the fact that the statute, not having been pleaded, is waived.*^ 
However this may be, the contrary is the rule.** 

• ^' 

Spangler r. DanfoHh, 65 IlL 152; Moss v. Atkinson, 44 CaL 8; North Platte 
Milling & Elevator Co. v. Price, 4 Wyo. 293, 33 Pac. 664; Nicholson v. Dover, 
145 N. C. 18, 58 S. E. 444, 13 L. R. A. (N. S.) 167. Bee '^Frauds, Statute of,** 
Dee. Dig. (Key-No.) || 103, 106; Cent. Dig. U 192-208. 

11 Johnson v. Dodgson, 2 Mees & W. 653; Glason's Ex'rs y. Bailey, 14 
Johns. (N. Y.) 484; Goddington v. Goddard, 16 Gray (Mass.) 436. Bee 
''Frauds, Btatute of,** Dec. Dig. (Key-No.) S IQS; Cent. Dig. {| 192-208. 

IS Tufts y. Mining Go., 14 Allen (Mass.) 407 ; McManos v. Gity of Boston, 
171 Mass. 152, 50 N. E. 607 (record of board of street commissioners) ; Lam* 
kin y. Manufacturing Go., 72 Gonn. 57, 47 Atl. 593, 1042, 44 L. R. A. 786. 
Bee **Frauds, Btatute of:* Deo. Dig. (Key-No.) f 103; Cent. Dig. U 192-208. 

it Marden y. GhampUn, 17 R. I. 423, 22 Ati. 938 ; Argus Go. v. Gity of 
Albany, 65 N. T. 495, 14 Am. Rep. 296; Gity of Greenville v. Waterworks 
Go., 125 Ala. 625, 27 South. 764. But see Wilhelm v. Fagan, 90 Mich. 6, 50 
N. W. 1072. Bee ^'Frauds, Btatute of,** Dec Dig. (Key-No.) f 103; Cent. Dig. 
U 192-208. 

1* Trevor y. Wood, 86 N. T. 807, 93 Am. Dec; 511 ; Marschall v. Vineyard 
Co., 1 Misc. Rep. 511, 21 N. T. Supp. 468; McElroy v. Buck, 35 Mich. 434; 
Little V. Dougherty, 11 Golo. 103, 17 Pac. 292; Everman v. Herndon (Miss.) 
11 South. 652; Whaley v. Hinchman, 22 Mo. App. 483. Bee *'FraudB, Stat- 
ute of,** Dee. Dig. (K^-No.) f 103; Cent. Dig. U 192-208. 

i» In re Hoyle, [1893] 1 Gh. 84. Bee "Frauds, Btatute of,*' Deo. Dig. (Key- 
No.) I 192; Cent. Dig. U 192-208. 

!• LOUISVILLE ASPHALT VARNISH GO. y. LORIGK, 29 S. G. 533, 8 
S. E. 8, 2 L. R. A. 212, Tlirockmorton Gas. Gontracts, 80; Gapitol Gity Brick 
Co. y. Atlanta Ice & Goai Go., 5 Ga. App. 436, 63 S. E. 562. Bee "Frauds. 
Btatute of,** Dec. Dig. (Key-No.) f 103; Cent. Dig. U 192-208, 263. 

IT Gregg v. Garrett, 13 Mont 10, 31 Pac. 721; Lauer v. Mercantile Inst, 
8 Utah, 305, 81 Pac. 397. See ante, p. 102, note 7; post, p. 120, notes 95, 
96. Bee "Frauds, Btatute of;' Dec. Dig. (Key-No.) S 103; Cent. Dig. §S 192- 

li Taylor y. Allen, 40 Minn. 433, 42 N. W. 292; HoUer v. Richards, 102 
N G. 545, 9 S. E. 460 ; Barrett v. McAUlster, 83 W. Va. 738, 11 S. B. 220 ; 
Browning v. .Berry, 107 N. G. 231. 12 S. E. 195. 10 L. R. A. 726. Bee "Frauds. 
Btatute of," Deo. Dig. (Key-No.) i 103; Cent. Dig. |i 192-208. 



104 8TATUTB or FRAUDS (Ch. i 

Showing as to Agreement 

The memorandum must show agreement on the part of the par- 
ty sought to be charged; that is, it must show a concluded con- 
tract in so far as he is concerned.^* In most jurisdictions, where a 
written proposal has been made by the party sought to be charged, 
an acceptance by the other party may be established by parol evi- 
dence.** 

Showing as to the Parties 

The memorandum of the contract must show who are the par- 
ties to it; not only who is the promisor, but who is the promisee 
as well. Thus, where a person promised that he would answer for 
the debt of a third person, and signed a memorandum to that effect, 
but the memorandum did not show the name of the promisee, it 
was held insufficient. "No document," it was said, "can be an 
agreement or memorandum of one, which does not show on its 
face who the parties making the agreement are/* *^ 

A party need not be named, if he is 'sufficiently described ; and 
the description will let in parol evidence to show his identity.** 

!• Coe V. Tough, 116 N. T. 273, 22 N. B. 550. See **Fraud$, Btatute of,'* 
Dee. Biff. (Key-No.) S 106; Cent. Dig. ^ 193-211. 

«o iteuBS V. Plcksley, L. R. 1 Bxch. 34(2 ; Farwell v. Lowther, 18 111. 252^ 
Cradle y. Warner, 140 111. 123, 29 N. E. 1118 ; Ehrmanntrant ▼. Robinson, 52 
Minn. 333, 54 N. W. 188 ; Hlmrod Fnmace Ck>. v. Railroad Co., 22 Ohio St 
451. See "Froiida, Statute of;* Dec. Dig. (Key-No.) f 106; Cent. Dig. |S 193- 
til. r 

SI Williams y. Lake, 2 El. Sc El. 349. And see McConnell y. Brlllhart, 17 
111. 354, 65 Am. Dec 661 ; McElroy y. Seery, 61 Md. 389, 48 Am. Rep. 110 ; 
Sherburne y. Shaw, 1 N. H. 157, 8 Am. Dec. 47; Grafton y. Gummlngs, 99 
U. S. 100, 25 L. Ed. 366 ; McGoyern y. Hern, 153 Mass. 308, 26 N. E. 861, 10 
L. R. A. 815, 25 Am. St Rep. 632; Lewis y. Wood, 153 BiaB& 321, 26 N. E. 
802, 11 L. R. A. 143 ; CJoombs v. Wilkes [1801] 3 Ch. 77 ; Watt y. Cranberry 
Co., 63 Iowa, 730, 18 N. W. 898. A memorandum of a sale of goods, which 
does not clearly show which party is yendor and which yendee, is not suffi- 
cient Frank y. Eltringham, 65 Miss. 281, 3 South. 655; Bailey y. Ogden, 3 
Johns. (N. Y.) 399, 3 Am. Dec 509. But see New^l y./ Radford, L. ft. 3 C. P. 
52; Salmon Falls Mfg. Co. y. Goddard, 14 How. 446, 14 L. Ed. 493; Thorn- 
ton y. Kelly, 11 R. I. 498. An auctioneer's memorandum of a sale of land 
must show who the yendor Is. 0*Sulllyan y. Qyerton, 56 Conn. 102, 14 Atl. 
300; Mentz y. Newwltter, 122 N. Y. 491, 25 N. B. 1044, 11 L. R. A. 97, 19 
Am. St Rep. 514. See "Frauds, Statute of," Dec. Dig. (Key-No.) || 107, 158; 
Cent. Dig. §& 212, 213, 375. 

ss Sale y. Lambert, 18 Eq. 1 ; Fessenden y. Mussey, 11 Cush. (Mass.) 127 ; 
Lemed y. Johns, 9 Allen (Mass.) 419 ; Catling y. King, 5 Ch. Dly. 660 ; Thorn- 
ton y. Kelly, 11 R. I. 498 ; Vlolett y. Powell's Adm'r, 10 B. Mon. (Ky.) 347, 
52 Am. Dec 548 ; Dykers y. Townsend, 24 N. Y. 57 ; Jones y. Dow, 142 Mass. 
130, 7 N. B. 839. Where a defendant had directed his factor to sell goods, 
and to use a fictitious name to represent him as seller, and the flctltloos name 
was Inserted la the factor's memorandum, parol eyidence wa^ held admlasl- 



§§ 44-49) VOBM BEQUIBSP 105 

Where A. in his own name enters into a contract as the agent of B., 
the other party to the contract may show by parol evidence that 
he really contracted with B., who has been described in the memo- 
randum in the character of A.^^ 

Shozving as to Terms 

Thgjnejn^randu m^ must contain all the material terms of the con- 
tract expressed with such cer tainty tfiat "It maj^ be_und^§tpod Yiitjx- 

QUtj-eroMrse to p^|^^leviH<^T^ <;;£«*' 

Where a contract does not fall within the statute, the parties 
may, at their option, put their agreement in writing, or may con- 
tract orally, or put some of the terms in writing, and arrange oth- 
ers orally. In the latter case, although that which is written can-» 
not be varied by parol evidence, yet the terms arranged orally may 
be proved by parol, in which case they supplement the writing, and 
the whole constitutes one entire contract. Where, however, a con- 
tract falls within the statute, all its terms must be in writing.** 
Parol evidence of terms not appearing in the writing would invali- 
date the contract by showing that it was different from what ap- 
pears in the memorandum. 

It is said in a Massachusetts case that.: ''The contract or memo- 
randum must express the substance of the contract with reasonable 
certainty, either by its own terms or by reference to some other 
deed, record, or other matter from which it can be ascertained with 

ble to show that the name represented defendant Bibb ▼. Allen, 149 U. S. 
481, 13 Sup. Ct 950, 37 I«. Ed. 819. But see Minard v. Mead, 7 Wend. (N. T.) 
68; Newcomb v. Clark, 1 Denio (N. Y.) 226. Bee **FraudB, Statute of,'* Deo. 
Diff. iKey-No.) U 107, 158; Cent. Dig. S| 212, 21S, 575. 

ssTrueman v. Loder, 11 Adol. & El. 689; Dykers r. Townsend, 24 N. T. 
B7 ; Sanbpm V, Flagler, 9 Allen (Mass.) 477 ; Hargrore v. Adcock, 111 N. C. 
166, 16 S. E. 16 ; McOonnell v. BrUlhart, 17 ni. 854, 65 Am. Dec 661 ; Violett 
T. Powell's Adm'r, 10 B. Mon. (Ky.) 847, 52 Am. Dec. 548 ; Hypes v. Griffin, 
89 lU. 134, 31 Am. Kep. 71; Tewksbury v. Howard, 138 Ind. 103, 37 N. E. 
35.5. The agent, however, so contracting cannot show by parol that he did 
not intend to bind himself. Higgins v. Senior, 8 Mees. & W. 834 ; Waring v. 
Idlason, 18 Wend. (N. Y.) 425. See '^Frauds, Statute of,** Deo. Dig. {Keg-No,) 
^158; Cent. Dig. | S75. 

a« Patt T. Gerst, 149 Ala. 287, 42 South. 1001 ; Seymour ▼. Oelrichs, 156 
Cal. 782, 106 Pac. 88, 134 Am. St. Rep. 154; McKnight v. Broadway In v. Co., 
147 Ky. 535, 145 S. W. 377. See ^'Frauds, Statute of,** Deo. Dig. {Key-No.) % 
US; Cent^Dig. %% 239-241. 

>sMay y. Ward, 134 Mass. 127; Drake ▼. Seaman, 97 N. Y. 230; Mess- 
more y. Cunningham, 78 Micb. 623, 44 N. W. 145; Lester y. Heidt, 86 Ga. 
226. 12 S. K. 214, 10 L. R. A. 108 ; Ringer y. Holtzclaw, 112 Mo. 519, 20 S. W. 
800 ; Fry y. Piatt, 32 Kan. 62, 3 Pac. 781 ; Willy v. Robert, 27 Mo. 388 ; 
CDonnell y. Leeman, 43 Me. 158, 69 Am. Dec. 54 ; Kriete y. My^r. 01 Md. 
55& See "Fraudt, Statute of,** Dec Dig.iKty-JSo.) % 113; Cent. Dig. {3 23i^ 
tit. 



106 STATUTE or rBAUDC ^ (Ch. 4 

like reasonable certainty. The statute is intended as a shield. No 
particular forms are required, and it looks at the substance of tht 
contract It fef^iiires a no te or memorandum of the contract, no t 
a det ail of all its partirtilars .'* *• While this is no doubt sound law, 
it must not be taken to mean that any of the terms of the contract 
can be shown by parol. 

Same — Pric£ and Terms of Payment 

The price is usually regarded as an essential term of a contract 
of sale and as such is required to be stated in the memorandum.*' 
This is certainly true where the action is by the vendor against 
the vendee, for the promise to pay the price is the most important 
part of the contract of the party who is sought to be charged.** It 
has been held, however, that a statement of the price is not neces- 
sary if it has been paid ; ** and some courts hold such statement not 

s« Atwood y. Cobb, 16 Pick. (Mass.) 230, 26 Am. Dec. 657. And see TJLIi- 
SPERGER V. MEYER. 217 lU. 2G2, 75 N. E. 482, 2 L. R. A. (N. S.) 221, 3 
Ann. Ca& 1032, Throckmorton Gas. Contracts, 74; Peck ▼. VaDdemark, 09 
N. T. 29, 1 N. B. 41 ; Frazer v. Howe, 106 111. 563 ; Farwell v. Mather, 10 
Allen (Mass.) 322, 87 Am. Dec. 641 ; Gordon y. Avery, 102 N. C. 632, 9 S. E. 
486. See **Frauds, Statute of/' Deo, Dig. {Key-No,) | 113; Cent, Dig. U ^S9^ 

til. 

tT Webster v. Brown," 67 Mich. 328, 34 N. W. 676; Fry v. Piatt, 82 Kan. 
62, 8 Pac. 781 ; Hanson v. Marsh, 40 &Iinn. 1, 40 N. W. 841 ; Phelps v. Still- 
ings, 60 N. H. 505 ; Soles v. Hickman, 20 Pa. 180. Contra in Texas, Morri- 
son y. Dailey (Tex.) 6 S. W. 426; Fulton ▼. Robinson, 55 Tex. 401. 

"If the promise in terms, however, be to pay what the goods are reason- 
ably worth, or if the promise be simply to pay for the goods, from which the 
law would infer a promise to pay their reasonable worth, then no definite 
or fixed price need be stated in the writing.** Turner ▼. Lorillard Co-., 100 
Ga. 645, 28 S. E. 383, 62 Ajol St Rep. 345, per Cobb, J. See **Frauds, Stat* 
ute of," Deo, Dig. (Key-No.) | lit; Cent, Dig, S 238. 

s» Ide V. Stanton, 15 Vt 685, 40 Am. Dec. 698; Adams y. McMillan, 7 Port 
(Ala.) 73 ; HaU v. Misenheimer, 137 N. C. 183, 49 S. B. 104, 107 Am. St Rep. 
474. In the case last dted it is said, per Walker, J.: "There is quite a dif- 
ference between the price to be paid by the vendee and the consideration neo- 
essary to support the contract and enforce it against the vendor. The latter 
can be shown by parol as at common law, and the writing, as said by Rufflh, 
G. J., in Miller v. Irvine [18 N. C. 104], need not contain any matters but 
such as charge him (the vendor) ; that Is, such stipulations as are to be per- 
formed on his part He is to convey, and the writing must be sufficient to 
show that this duty rests upon him, as one of the parties to the contract, 
when he Is sought to be charged. The vendee is to pay a certain price, and 
the writing must likewise show his obligation — its nature and extent — when 
the action is against him" [citing Clark on Contracts (2d Ed.) pp. 85, 86, 871. 
See **Fraud$, Statute of;* Dec. Dig. (Key-No.) S 112; Cent. Dig. | 238. 

«• Sayward v. Gardner, 6 Wash. 247, 31 Pac. 761, 33 Pac. 389. Bee 
**Fraud9, Statute of," Deo. Dig. (Key-No.) | 112; Cent. Dig. ^ 238. 



S§ 44-49) TOBM BBQUIBSD 107 

necessary to the sufficiency of a memorandum hi a suit by the ven- 
dee against the vendor.** 

Even where the price is stated, some courts hold the memoran- 
dum insufficient if it fails to state the terms of payment.** 

Shoxving as to Subject-Matter 

The writing must also show the subject-matter, at least to such 
an extent that it can be identified.** Parol evidence is admitted to 
identify the subject-matter to which the writing refers; as, for in- 
stance, to identify a house described in the writing as a "house on 
Church street," or property described as "your half, E. B. wharf, 
and premises this day agreed upon between us." •• Such parol evi- 

«• Hayes v. Jackson, 169 Mass. 451, 84 N. E. 683 [overniUng Grace ▼. Denl- 
•on, 114 Mass. 16] ; White v. Dablqulst Mftf. Co., 179 Mass. 427, 60 N. B. 791 ; 
Johnson v. Konald, 4 Munf. (Va.) 77. Contra, Kelly v. T;huey, 143 Mo. 422, 
45 S. W. 800, in which It is said, per Sherwood, J.: "At one time in this court 
the heresy was announced that parol testimony was admissible for the pur- 
pose indicated. " O'Neil ▼. Crain, 67 Mo. 251. The last erroneous adjudica- 
tion on this subject is found in BHis v. Bray. 79 Mo. 227 ; but the contrary 
and correct ruling was declared in Ringer v. Holtzclaw, 112 Ma 519, 20 S. 
W. 800, and followed in Boyd ▼. Paul. 125 Mo. 9, 28 S. W. 171." And see 
cases cited supra, note 27. See '^Frauds, Statute of,*" Deo. Dig, (Key-No.) 
1 112; Cent. Dig. i 2S8. 

ti Sault y. Stormont, 51 Mich. 636, 17 N. W. 214; Nelson ▼. Shelby Mfg. 
ft Imp. Co., 96 Ala. 515. 11 South. 695, 88 Am. St Rep. 116 (memorandum 
relied on by vendor to establish yalidlty of contract against vendee). Bee 
'^Fraude, Statute of;* Deo. Dig. {KepNo.) f 112; Cent. Dig. | 2S8.. 

»s Whelan v. Sullivan, 102 Mass. 204; Beekman v. Fletcher, 48 Mich. 555, 
12 N. W. 849 ; Tlce v. Freeman. 80 Minn. 389. 15 N. W. 674 ; King v. Wood, 
7 Mo. 389 ; Mason v. SmaU, 130 Mo. App. 249, 109 S. W. 822. '*! have sold 
this place" is not sufficient Cunha ▼. Gallery. 29 R. I. 230. 69 AtL 1001. 18 
L. R. A. (N. S.) 616. 132 Am. St Rep. 811. See ''Fraude, Statute of,** Deo. 
Dig. {KeV'No.) II 109, 110; Cent. Dig. H 222-2S6. 

s» Mead v. Parker, 115 Mass. 413, 15 Am. Rep. 110; Tallman v. Franklin, 
14 N. Y. 584 ; Ryan v. United States, 136 U. S. 68, 10 Sup. Gt 913, 84 L. Bd. 
447 ; MeUon v. Davison, 123 Pa. 298, 16 Atl. 431 ; Henderson v. Perkins, 94 
Ky. 207, 21 S. W. 1085; Dougherty r. Ghesnutt, 86 Tenn. 1, 5 S. W. 444; 
Lente v. Clarke, 22 Fla. 515, 1 South. 149; Cossitt v. Hobbs, 56 lU. 231; 
Hollis V. Burgess. 37 Kan. 487, 15 Pac. 536; Qulnn v. Champagne, 38 Minn. 
322. 37 N. W. 451 ; Breckinridge v. Crocker, 78 CaL 529, 21 Paa 179 ; Hum- 
bert V. Brisbane. 25 S. C. 506; Oliver v. Hunting. 44 Gh. Div. 205; Francis 
▼. Barry, 69 Mich. 311, 37 N. W. 353. A memorandum is not sufficient where 
it merely describes it as "an estate on A. street, owned by B.." and the evi- 
dence shows that B. owned two estates on that street Doherty v. HUl. 144 
Mass. 465, 11 N. B. 681. And see Jones v. Tye, 93 Ky. 380, 20 S. W. 388; 
Alabama Blineral Land Go. v. Jackson, 121 Ala. 172. 25 South. 700, 77 Am. 
St Rep. 46. ''Tour land." in a letter to the aUeged vendor is not sufficient 
Taylor v.- Allen, 40 Minn. 433. 42 N. W. 292. And see Xx>we v. Harris, 112 
N. G. 472. 17 S. B. 539. 22 L. R. A. 379. A memorandum that P. shall have 
the land *'of which he is now in possession'* has been held sufficient PhU- 



108 8TATUTB OF FBAUD8 (Ch. 4 

dcnce, however, is confined to evidence of the location of objects 
mentioned, the circumstances of the parties, as, for example, the 
property owned by them, and other external matters, and does not 
extend to spoken language passing between the parties.^* It must 
be confined to the construction and application of the writing and 
may not be used to add to or subtract from it** 

Showing as to Consideration 

Not only must a consideration for the promise sought to be en- 
forced exist, but It must, according to the rulings in England, and 
probably in most of the states, expressly or impliedly appear in the 
memorandum. As stated by Lord EHenborough in die leading case 
on this point, the reason for the rule is b ecau se the word **agr ee- 
ment." used in the statute, "is not satisfied unless there be a co n- 
sideratipfl j whicIT consFderation, forming part of the a.gre emen t, 
o ught, therefo re, to have been shown; and the promise is not bind- 
ing by the statute unless the^ consideration which forms part of the 
agreement be also stated in writing." •• Other courts have refused 
to recognize this doctrine, though in some of these cases the stat- 
ute used the word "promise" instead of "agreement." •^ Most of 

lips ▼. Swank, 120 Pa. 76, 13 Atl. 712, 6 Am. St Rep. 691. And see Falls of 
Nense Mfg. Go. ▼. Hendricks, 106 N. G. 485, 11 S. E. 568. An agreement for 
the sale of a designated nud)l)ei»'Of acres "In" a specified larger tract of land 
is not sufflcleD.t Broctoway v. Frost, 40 Minn. 155, 41 N. W. 411. And see 
Repettl Y. Maisak, 6 Mackey, 366. 8ee **Frauds, Statute of," Dea Diff, (Key- 
No.) f§ 109, 110, 158; Cent. Diff. || 222^286, S75. 

t^Desmarais v. Taft, 210 Mass. 560, 07 N. E. 9a Bee **Fraud^, Statute 
of," Deo. Dig. (Key-No.) S 158; Cent. Dig. I S75. ' 

t« Gole r. Gole, 99 Miss. 335, 54 South. 953, 34 L. R. A. (N. S.) 147, Ann. 
Gas. 1913E, 332 ; Bogard v. Barhan, 52 Or. 121, 96 Pac. 673, 132 Am. St Rep. 
676. See '^Frauds, Statute of," Deo. Dig. (Key-No.) || 109-111; Cent. Diff: 
H 222-297. 

te Wain ▼. Warlters, 5 East, 10. And see Sears ▼. Brink, 8 John& (N. Y.) 
210, 3 Am. Dec. 475 ; Taylor v. Pratt, 3 Wis. 674 ; Thompson v. Blanchard; 3 
N. T. 335; Ordeman t. Lawson, 49 Md. 135; Sloan y. Wilson, 4 Har. & J. 
(Md.) 322, 7 .Am. Dec. 672; Buckley v. Beardslee, 5 N. J. Law, 572, 8 Am. 
Dec. 620; Gregory v. Logan, 7 Blackf. (Ind.) 112; Ellison y. Water Go., 12 
Gal. 542; Hargroves v. Gooke, 15 Ga. 321. It is sufficient if the considera- 
tion can be gathered from the entire contract The words ''value received*' 
have been held enough. Watson's Ex'rs v. McLaren, 19 Wend. (N. Y.) 557; 
D. M. Osborne & Go. v. Baker, 34 Minn. 307, 25 N. W. 606, 57 Am. Rep. 55 ; 
Edelin <y. Gough, 5 Gill (Md.) 103 ; Emerson v. G. Aultman & Go., G9 Md. 
125, 14 Atl. 671; Smith v. Northrup. 80 Hun, 65, 29 N. Y. Supp. 851. The 
presence of a seal has been held a sufficient recital of the consideration. 
Johnston v. Wadsworth, 24 Or. 494, 34 Paa 13; Smith v. Northrup, supra. 
See '^Frauds, Statute of," Dec. Diff. (Key-No.) f 108; Cent. Diff. K tHr22l. 

ST Packard v. Richardson, 17 Mas& 122» 9 Am. Dec. 123; Brittain y. Ain- 
gier, 48 N. H. 422; QiUighan v. Boardman, 29 Mew 79; Patchin y. Swift 21 
Vt 292 ; Shively y. BUck, 45 Pa. 345 ; Sage y. Wilcox, 6 Gonn. 81 ; Yiolett 






/^.-^^""'"^ . ..w-v-'/-- 



the states, however, have put this question at rest by statutory- 
provisions expressly declaring it necessary •• or unnecessary •• to 
express the consideration in the writing. Even where the statute 
provides that the consideration need not be expressed, it must /be 
expressed if it is executory, and modifies the promise ; for in such 
case it is a term of the contract.** 

Separate Papers 

The memorandum may consist in any number of letters, tele- 
grams, or other pieces of paper.*^ The papers, howfcver, must be 
connected, consistent, and complete. 

It is generally held that the connection between various papers 
must be made out from the papers themselves,*' and that it cannot 

T. Patton, 5 Cranch, 101, 8 L. Ed. 61 (construini the Virginia statute) ; Reed 
y. Evans, 17 Ohio, 128; Steadman ▼. Quthrle, 4 Mete. (Ky.) 147; Taylor ▼. 
Roes, 3 Terg. (Tenn.) 330; Adklns y. Watson, 12 Tez« 109; Halaa y. Halsa, 
8 Mo. 303; How y. KembaH, 2 McLean, 103, Fed. Cas. No. 6,748; Brown v. 
Fowler, 70 N. H. 211, -47 AU. 412. Bee ''Frauds, Statute of," Deo. Dig. (Key- 
No.) I 108; Cent. Dig. U tlJh^tl. 

»s It iB declared necessary In Alabama, Bilnneaota, Nevada, Oregon, and 
Wisconsin. But tbe amount of the consideration need not appear, and the 
words **for value received" are sufQcient Jansen v. Kuenzie, 146 Wis. 473, 
ISO N. W. 450, Ann. Cas. 1912A, 1241. A guaranty of a note, writtoi by a 
third person cm the note before deUvery, need express no consideration, since 
the guaranty requires no other consideration than that which the note on 
Its tsLoe implies to have passed between the original parties. Moses v. Bank, 
149 U. S. 298, 13 Sup. Gt 900, 37 L. Ed. 743 (under Alabama statute). Con- 
tra: Commercial Nat Bank of Appleton v. Smith, 107 Wis. 574, 83 N. W. 766. 
It is otherwise if the guaranty is written after the note has been delivered 
and taken effect as a contract Moses v. Bank, supra. See ''Frauds, Statute 
«/," Deo. Dig. (Key-No.) S 108; Cent. Dig. H tlk-ni. 

*• It is declared unnecessary in Illinois, Indiana, Kentucky, Maine, Bfassa- 
ehusetts, Michigan, J^ebraska, New Jersey, and Virginia. See Hayes v. Jack- 
son, 159 Biass. 451, 34 N. B. 683. See "Frauds, Statute oft"* Deo. Dig. {Key- 
No.) I 108; Cent. Dig. Sf tlJh^tl. 

«o See Drake v. Seaman, 97 N. Y. 230. And see ante, p. 106. See ''Frauds, 
Statute of,** Deo. Dig. {Key-No.) f 108; Cent. Dig. H m-nu 

41 LOUISVILLE ASPHALT VAKNISH CO. v. LORICK, 29 S. a 533, 8 S. 
B. 8, 2 L. R. A. 212, Throckmorton Cas. Contracts, 80; Reuse v. Plcksley, 
L. R. 1 Ezch. 342 ; Ryan v. United States, 136 U. S. 83, 10 Sup. Ct 913, 34 i. 
Ed. 447; Hollis v. Burgess, 37 Kan. 487, 15 Pac. 536; Lee v. Cherry, £^ 
Tenn. 707, 4 S. W. 835, 4 Am. St Rep. 800; Roehl v. Haumesser, 114 Ind. 
811, 15 N. E. 345; Gulf, C. & S. F. Ry. Co. v. Settegast, 79 Tex. 256, 15 r¥. 
W. 228; Bayne v. Wiggins, 139 U. S. 210, 11 Sup. Ct 521, 35 L. Ed. 14^; 
Olson V. Sharpless, 53 Minn. 91, 55 N. W. 125; Schneider v. Anderson, 75 
Kan. 11, 88 Pac. 525, 121 Am. St Rep. 356. See "Frauds, Statute of," Deo. 
Dig. (Key-No.) 1 108; Cent. Dig. |S Zlk-4t21. 

«> If all the separate papers are signed, reference in the one to the other 
need not be made, if by inspection and comparison It appears that they form 
part of the same transaction. Thayer t. Luce, 22 Ohio St 62. See, also, 



t. 






1 -r -^ ^^ 



110 / STATUTE OF FRAUDS (Ch. 4 

be shown by parol evidence.** But, if one paper is referred to in 
another, it may be identified by parol evidence.** 

To say that the papers must be consistent is merely to reiterate 
what was said in treating of offer and acceptance. 

Signature 

It is essential that the memorandum be signed by "the party to 
be charged," or some other person by him lawfully authorized.** 
As to wlVether it must have been signed by the party seeking to 
enforce it, there is some conflict. Probably all courts hold that it 
need not be so signed if the consideration given by the party suing 
is executed. The conflict is where there are mutual promises. Some 
courts hold in these cases that the contract, not being enforceable 
against the party who has not signed it, is void for want of mutual- 
ity.** Most courts hold that the statute is satisfied if the memoran- 



Brewer ▼. Horst & Lachmund Co., 127 Cal. 0^ 60 Pac 418, 00 L. R. A. 240. 
But see Potter v. Peters, 72 L. J. Rep. 624. See **Frauds, Statute of,'* Dec. 
Dig. (Key-No;^ f 118; Cent. Diff. % 264^ 

** Where a person issued a prospectus of illustratlous of Shakspeare, to 
be published on terms of subscription therein set out, and A. entered his 
name in a book entitled ''Shakspeare Subscribers, their Signatures,'* in the 
publisher's shop, and afterwards refused to subscribe, it was held that there 
was no sufficient reference to connect the subscription book with the pro- 

. spectus, so as to make a memorandum. BoydeU ▼. Drummond, 11 East, 142. 

^ And see Peirce ▼. Corf, L. R. 9 Q. B. 210 ; Taylor y. Smith, 61 Law J. Q. B. 

(v881; Morton v. Dean, 13 Mete (Mass.) 885; O'DonneU y. Leeman, 43 Me. 
158, 69 Am. Dec 54; Doughty, v. Manhattan Brass Co., 101 N.. Y. 644, 4 N. E. 
747 ; North y. Mendel, 73 Ga. 400, 54 Am. Rep. 879 ; Oliver y. Insurance Co., 

82 Ala. 417, 2 South. 445; Orne v. Cook, 31 IlL 238; Duff y. Hopkins (D. C.) 

83 Fed. 599; Coombs y. Wilkes, [18911 8 Ch. 77; Andrew y. Babcock, 63 
Conn. 109, 26 Atl. 715. A contract for the sale of land, containing no de- 
scription of it, was held insufficient, though there was a description of land 
on the fiack of the paper, there being no words to connect the indorsement 
with the contract WUstach y. Heyd, 122 Ind. 574, 23 N. E. 963. Reciprocal 
wills not referring to each other. Hale y. Hale, 90 Va. 728, 19 S. E. 739. 
Se6 **Fraud8, Statute of," Dec. Dig. {Key-Vo.) % 118; Cent. Dig. | 264. 

44 Long y. Miller, 4 C. P. Div. 450; Oliyer y. Insurance Co., 82 Ala. 417, 2 
South. 445 ; Beckwith y. Talbot, 95 U. S. 289, 24 L. Ed. 406 ; Peck y. Vande- 
mark, 99 N. T. 29, 1 N. E. 41 ; Work y. Cowhick, 81 111. 317 ; Lee y. Butler, 
167 Mass. 426, 46 N. E. 52, 57 Am. St Rep. 466. See '* Frauds^ Statute of;' 
Deo. Dig. {Key-No.) f 118; Cent. Dig. | 264. 

4B Sanborn y. Sanborn, 7 Gray (Mass.) 142 ; Cloud y. Greasley, 125 111. 313, 
17 N. E. 826; Rafferty y. Lougee, 63 N. H. 54; Bailey y. Ogden, 3 Johns. 
<N. Y.) 399, 8 Am. Dec. 509 ; Guthrie y. Anderson, 47 Kan. 383, 28 Pac 164 ; 
Id., 49 Kan. 416, 80 Pac 459; McElroy y. Seery, 61 Md. 389, 48 Am. Rep. 
110; Moore y. PoweU, 6 Tex. Ciy. App. 43, 25 S. W. 472. Cf. Gatdels v. 
Kloke, 36 Neb. 493, 54 N. W. 834. See **Frauds, Statute of,** Deo. Dig. {Key- 
No.) S 115; Cent. Dig. fS 242-250. 

4e WUkinson y. Heayenrich, 58 Mich. 574, 26 N. W. 139, 55 Am. Rep. 708; 
Corbitt y. Gaslight Co., 6 Or. 405, 25 Am. Rep. 541 ; Krohn y. Bantz, 68 lad. 



S§ 4i-49) FOBM REQUIBED 111 

dam is signed by the party against whom it is sought to be enforc- 
cd/» ' 

The signature may be by mark *• or initials/* or it may be type- 
writtcn/* printed, stamped, or engraved.'* Nor need the signature 
be placed at the end of the document as a-formal signature. If the 
name of the party to be charged appear in the memorandum, so as 
to be applicable to the whole substance of the writing, and was 
written by himself, or by his authorized agent, it is immaterial 
where the name appears, whether at the top or at the bottom, or 
whether it is merely mentioned in the body of the memorandum.'* 
Where, however, the statute requires the memorandum to be "sub- 

277; Stiles y. McGleUan, 6 Colo. 89. Bee **FraudB, Statute of,"* Dec Dig. 
(Key-No.) | 115; Cent. Dig. U tk^^ZoO. 

*T ULLSPERGER v. MEYER, 217 111. 262, 75 N. E. 482, 2 L. R. A. (N. S.) 
221, 3 Ann. Gas. 1032, Throckmorton Cas. Ck)ntTact8, 74 ; Justice y. Lang, 42 
N. Y. 493, 1 Am. Rep. 576; Reuss v. Picksley, L. R 1 Ezch. 842; Gladon*8 
Ez'rs Y. Bailey, 14 Johns. (N. Y.) 487; Old Colony R. Co. v. Evans, 6 Gray 
(Mass.) 25, 66 Am. Dec. 394 ; Love v. Welch, 97 N. C. 200, 2 S. E. 242 ; WU- 
llams V. Robinson, 73 Me. 186, 40 Am. Rep. 352; Oliver v. Insurance Co., 82 
Ala. 417, 2 South. 445; J. I. Case Threshing Mach. Co. v. Smith, 16 Ojr. 3S1, 
18 Pac. 641 ; Smithes Appeal, 69 Pa. 481 ; Anderson v. Harold; 10 Ohio, 309 ; 
Ives V. Hazard, 4 R. L 14, 67 Am. Dec. 500 ; Hodges v. Kowlng, 58 Conn. 12, 
18 AU. 979, 7 L. R. A. 87 ; Perkins v. HadseU, 50 ni. 217 ; Gartrell v. Staf- 
ford, 12 Neh. 545, 11 N. W. 732, 41 Am. Rep. 767 ; Cunningham v. WiUiams, 
43 Mo. App. 629 ; Scott v. Glenn, 97 CaL 513, 82 Pac. 573 ; Jones v. Davis, 48 
N. J. £q. 493, 21 Atl. 1035 ; Capitol City Brick Co. v. Atlanta Ice & Coal Co., 
5 Ga. App. 436, 63 S. E. 562. Bee ^'Frauds, Statute of,'* Dec. Dig. i^ey-Vo.) 
f 115; Cent. Dig. {| tJ^ftSO. 

4« Baker y. Dening, 8 AdoL & E. 94; Zacharie v. Franklin, 12 Pet 151, 9 
L. Ed. 1035; Brown y. Bank, 6 Hm (N. Y.) 443, 41 Am. Dec. 755. Bee 
^'Frauds, Statute of;* Dec Dig. {Keg-Vo.) % 116; Cent. Dig. H 242-250. 

«• Sanhom y. Flagler, 9 Allen (Mass.) 474; Salmon Falls Mfg. Co. y. God- 
dard, 14 How. 447, 14 L. Ed. 493 ; Palmer v. Stephens, 1 Denio (N. Y.) 471. 
Bee ^'Frauds, Statute of;* Dec. Dig. (Key-No.) | 115; Cent. Dig. || 242-250. 

»• Garton Toy Co. v. Buswell Lumber & Mftf. Co., 150 Wis. 341, 136 N. W. 
147. See **Fraud$, Statute of;* Deo. Dig. (Key-No.) | 115; Cent. Dig. || 242- 
250. 

«i Bennett y. Brumfitt, L. R. 8 C. P. 30 ; Drury v. Young, 58 Md. 546, 42 
Am. Rep. 343; Schneider y. Norris, 2 Maule & S. 286; Weston y. Myers, 33 
lU. 424. See '^Frauds, Statute of;* Dec Dig. (Key-No.) | 115; Cent. Dig. 
H 242-250. 

at Davis Y. Shields, 26 Wend. (N. Y.) 341, 353; Coddington v. Goddard, 
16 Gray (mAss.) 444 ; Caton v. Caton, L. R. 2 H. L. 127 ; Clason*s Ez'rs v. 
Bailey, 14 Johns. (N. Y.) 484; Boardman v. Spooner, 13 AUen (Mass.) 358, 90 
Am. Dec. 196; Penniman v. Hartshorn, 13 Mass. 87; Evans v. Hoare [1892] 
1 Q. B. 593; Braley v. Kelly, 25 Minn. 160; Tingley v. Boom Co., 5 Wash. 
044, 32 Pac 737, 33 Pac. 1055. Bee **FraudM, Statute of;* Dec Dig. (Key-Noi 
S 115; Cent. Dig. H 242-250. 



...-"' 



112 STATUTE or WBAvim (Ch. 4 

scribed/' it has been held that there miist be a formal signature at 
the bottom of the memorandum.* • 

A party to a contract may sign a rough draft of its terms, and 
acknowledge his signature when the draft has been corrected, and 
the contract is actually concluded.** 

Signature h{y Agent 

The memorandum may be signed by the duly authorized agent 
of the party to be charged.** The agent must not be the other con- 
tracting party, but some third person, for to allow otherwise would 
be to open the door for the fraud which the statute was intended t» 
prevent** 
J The same person, however, as, for example a broker, may act as 
agent for both parties.*^ So in cases of sales at auction, the auc- 
tioneer, acting only as such, is the competent agent of both parties, 
and his memorandum is binding on both. He is the agent of the 
vendor by virtue of his employment, and he is made the agent of 
the vendee by the act of the latter in giving him his bid, and receiv- 
ing the announcement that the property is knocked off to him as 
purchaser.** This, however, does not apply where the vendor is 
himself the auctioneer.** The memorandum must be made at the 
time of the sale.** 

Bt Davis ▼. Shields, 26 Wend. (N. T.) 841. And see James y. Patten, • IC 
Y. 9, 55 Am. Dec. 876; Champlin y. Parrish, 11 Paige (N. T.) 405. B90 
'^frauds. Statute of,** Dec. Diff. (Key-No.) $ 115; Cent. Dig. If t4B^50. 
' *»* Stewart ▼. Eddowes, L. B. 9 C. P. 314. See **Frauds, Statute of,** Deo. 
mg. {Key-No.) S 115; Cent. Dig. U t^t-tSO. 

»• Heflron v. Armsby, 61 Mich. 505, 28 N. W. 672; Tynan ▼. Dnllnig (Tex. 
Civ. App.) 25 S. W. 465. See "Frauds, Statute of," Deo. Dig. (Key-No.) | 
116; Cent. Dig. S| 251-260; ^'Principal and Agent;* Cent. Dig. | S80. 

Be Bent v. Cobb, 9 Gray (Mass.) 397, 69 Am. Dec. 295. And see Sherman 
V. Brandt, L. B. 6 Q. B. 720; Farebrother t. Simmons, 5 Bam. Sc Aid. 333;- 
Carlis]e v. Campbell, 76 Ala. 247 ; Drury v. Toung, 58 Md. 546, 42 Am. Bep. 
843. See "^Frauds, Statute of,** Deo. Dig. (Key-No.) f 116; Cent. Dig. S§ 251- 
260. 

ST Ankeny v. Tonng Bifos,, 62 Wash. 235, 100 Pac. 736. Bee "Frauds, Stat- 
ute of,** Dec Dig. (Key-No.) f 116; Cent. Dig. U 251-260. 

58 Bent V. (^bb, 9 Gray (Mass.) 897, 69 Am. Dee. 295; Trustees of First 
Baptist Church of Ithaca v. Bigelow, 16 Wend. (N. T.) 28; Morton v. Dean, 
18 Mete (Mass.) 385; McBrayer v. Cohen (Ky.) 18 S. W. 128; Meadows t. 
Meadows, 3 McCk)rd (S. C.) 458^ 15 Am. Dec. 645 ; Singstack's Ez'rs v. Hard- 
ing, 4 Har. & J. (Md.) 186, 7 Am. Dec. 669. See WyckoflT v. Mlckle (N. J. Ch.) 
20 AtL 214. See "Frauds, Statute of,** Dec. Dig. (Key-No.) | 116; Cent. Dig. 
n 251-260. 

5* Bent V. Ck>bb, 9 Gray (Mass.) 397, 69 Am. Dec. 295. See "Frauds, Stat-^ 
ute of,** Dec. Dig. (Key-No.) | 116; Cent, Dig. U 251-260. 

eoGill V. Bicknell, 2 Cush. (Mass.) 355; Horton v. MeCarty, ;S8 Me. 89^ 
See "Frauds, Statute of,** Dec Dig. (Key-No.) f 110; Cent. Dig. U 251-26$. 






IS 44r49) FORM BEQUIRBD JL18 

\ 

As we have already seen, if the agent signs his own name, the 
other party to the contract may show by parol that he really con- 
tracted with the principal.*^ The agent, however, after making the 
contract in his own name, cannot show by parol that he is not the 
real party to the contract.** 

Unless the statute expressly so requires, the authority of the 
agent need not be in writing.*' In some states, however, the stat- 
ute does so require in the case of certain contracts, as contracts re- 
lating to land,** or contracts of suretyship.** y ^-^ ^ f 

Delivery ""^ 

The memorandum, being required merely as evidence of the con- 
tract, need not be delivered.** Nondelivery is only material in so 
far as it may tend to show that no final agreement has been reach-' 
cd. It is held, however, that a deed of land must be delivered .to 
constitute a sufficie nt ly^^ir^riin^UF^^ A delivery ol the deed in 
escrow is sufficient** 

•1 Ante. p. 105. '. 

•s Hlggins Y. Senior, 8 Mees. & W. 834 ; Waring ▼. Mason, 18 Wend. (N. 
Y.) 425. Bee ** Frauds, Statute o/," Dec, Dig. {Key-No.) f 110; Cent. Dig. fit 

tsi-teo. 

•• Roehl ▼. Haumesser, 114 Ind. 811, 15 N. £). 845 ; Kennedy v. Ehlen, 81 
W. Va. 540, 8 S. E. 398; Watson v. Sherman, 84 111. at page 267. See 
'^Frauds, Statute of;* Dec. Dig. (Key-No.) f 116; Cent. Dig. S| 251-260. 

•4 Hall y. Wallace, 88 Gal. 434, 26 Pac. 360 ; Gerbart v. Peck, 42 Mo. App. 
644 ; Castner v. Richardson, 18 Colo. 496, 83 Pac. 163 ; Kozel v. Dearlove, 144 
111. 23, 82 N. E. 542, 36 Am. St Rep. 416 ; Detroit, P. & N. Ry. Oo. v. Hartz, 
147 Mich. 854, 110 N. W. 1089 ; Thomas v. Rogers, 108 Minn. 132, 121 N. W. 
630, 133 Am. St Rep. 421 ; Adams v. Carlton, 77 Kan. 546, 95 Pac. 390 ; Ross 
V. Craven, 84 Neb. 520, 121 N. W.^451 ; Cobban t. Hecklen, 27 Mont 245, 70 
Paa 805. See "Fraud; Statute of;* Deo. Dig. (Key-No.) | 116; Oent. Dig. 
Si 261-260. 

•s Simpson ▼. Commonwealth, 89 Ky. 412, 12 S. W. 630. See '^Frauds, 
Statute of,** Dec Dig. (Key-No.) § 116; Cent. Dig. SI 251-260. 

••Dniry ▼. Toung, 58 Md. W6, 42 Am. Rep. 343; Ames y. Ames, 46 Ind. 
App. 597, 91 N. B. 509. See "Frauds, Statute of,** Dec. Dig. (Key-No.) f 117; 
Cent. Dig. | 261. 

•t Wler V. Batdorf , 24 Neb. 83. 38 N. W. 22 ; Callanan ▼. Chapin, 158 Mast, 
118, 32 N. E. 941 ; Swain v. Burnette, 89 Cal. 564, 26 Pac. 1093 ; Day v. La- 
oasse, 85 Me. 242. 27 Atl. 124. And see Kopp v. Relter, 146 111. 437, 34 N. E. 
942, 22 L. R. A. 273, 37 Am. St Rep. 156. But see Johnston y. Jones, 85 Ala. 
286, 4 South. 74a See **Frauds, Statute of,** Dec. Dig, (Key-No.) | 117; Cent. 
Dig. S 261. 

••Johnston y. Jones, 85 Ala. 286, 4 South. 748; Cannon y. Handley, 72 
Cal. 133, 13 "Pac. 815 ; Lewis y. Praiher (Ky.) 21 S. W. 538. But see Ducett 
V. Wolf, 81 Mich. 311, 45 N. W. 829. Bee **Frauds, Statute of,*' Dec Dig. 
{Key-No.) i 117; Cent. Dig. | 261. 

Clabk Cont.(8d Ed.)— S 






/ 




114 tTATUTB OF FRAUDS (Ch. 4 



SAME^EFFECT OF NONCOMPLIANCE 

50-51. Failure to comply with the requirement of the fourth 
tion does not render the contract void, but merely 
/ dudes parol proof, and renders it unenforceable. 

The English statute, which has been followed by the statutes 
of most of the states, does not declare that the contracts^ if 
entered intp 0jallx4^sh^lLbJi-iQiiLhlU;.-SU0plz that "hq acfion shall 
be brought" on theiyi. The statute docs not go to the existence 
of the contract, but merely makes written evidence necessary to 
establish It The contract is not void, but simply unenforceable 
by suit.** 

Although the contract cannot, for this reason, be sued upon suc- 
cessfully, it is available for some purposes. If it has been fully 
performed, the courts will recognize and protect the rights of the 
parties acquired under it.'* And if it has been performed by one 
of the parties by payment of the consideration he will not be 
allowed to recover back what he has paid, where the other party 
is willing to perform on his part'* 

••BRITAIN ▼. KOSSITER, 11 Q. B. Dlv. 123, Throckmorton, Caa. Con- 
tracts, 88; Leroux ▼. Brown, 12 C. B. 801; Townsend v. Hargrayes, 118 
Mass. 825; Montague y. Garnett, 8 Bush (Ky.) 297; Baker y. Lanterbach, 
68 Md. 64, 11 Atl. 703 ; Crane y. Gough, 4 Md. 316 ; Newton y. Bronson, 13 
N. Y. 687, 67 Am. Dec. 89; Brakefleld y. Anderson, 87 Tenn. 206, 10 S. W. 
360; Browning y. Parker, 17 R. I. 183, 20 AtL 835; Ohio & M. R. Co. y. 
Trapp, 4 Ind. App. 69, 30 N. E. 812; Montgomery y. Edwards, 46 Vt 151, 14 
Am. Rep. 618; Chicago Dock Co. y. Klnzie, 49 IlL 289; La Dn-King Mfg. 
Co. y. La Du, 36 Minn. 443, 81 N. W. 938; Bird t. Mnnroe, 66 Me. 337, 22 
Am. Rep. 571. The courts often use the word "yold" carelessly, and the fact 
that they speak of a contract as yoid cannot always be relied on. 8e9 
^'Frauds, Statute of," Deck Dig. (Key-Vo,) %% 119, 125; Cent. Dig. SI US, tSS^ 
217. 

T9 See supra, note 69. 

Ti Galway y. Shields, 66 Mo. 318, 27 Am. Rep. 351; Coughlln t. Knowles, 
7 Mete. (Mass.) 57, 39 Am. Dec. 759 ; Sims y. Hutchlns, 8 Smedes & M. (Miss.) 
331, 47 Am. Dea 90; Shaw y. Shaw, 6 Vt 69; Hawley y. Moody, 24 Vt 605. 
And see Lane y. Shackford, 5 N. H. 130; Richards y. Allen, 17 Me. 296; 
Bedinger y. Whlttamore, 2 J. J. Marsh. (Ky.) 563 ; Collier y. Coates, 17 Barb. 
(N. Y.) 473 ; McKlnney y. Haryle, 38 Minn. 18, 35 N. W. 608, 8 Am. St Rep. 
640; Nelson y. Improying Ck>., 96 Ala. 515, 11 South. 695, 38 Am. St Rep. 
116 ; Butler y. Dinan, 65 Hun, 620, 19 N. Y. Supp. 950. But see Hartwell y. 
Young, 67 Hun, 472, 22 N. Y. Supp. 486, in which it was held that a person 
orally employed for a longer period than a year may abandon the contract 
without fault on his employer's part, and recover for the services rendered; 
post, p. 119. 8ee '*Fraud$, Statute of,"* Deo, Dig. {Keg-No.) H tl9, 125; 
Cent. Dig. %% 113, 26e-277. 



^0 '''■'■ '^'Ct ^-'1^ 



' U 

§§ 50-61) EFFEOT OF NONOOMFUANOB 115 

In some states, however, the statute declares that the contract 
"shall be void" unless in writing/* In these states it seems that 
the statute goes to the existence of the contract, and renders it 
absolutely void. In a Massachusetts case, however, in construing 
the section of the statute of that state relating to contracts for the 
sale of goods, which declared that no such contract should be 
held to be good and "vaKd," it was held that it was not the inten- 
tion of the legislature to declare such contracts void, but simply 
to prevent oral oroof.^* 

Further illustration of the rule that a contract which does'nqt 
comply with the statute is not void, but simply unenforceable, is 
found in the mode in which courts of equity des^l with such con- 
tracts, to be presently explained. 

Part Performance * \ A 

At law, unless the statute so provides, part performance of an / h /i/'/ 
oral contract does not take it out of the operation of the statute; ^-*/ V-^^- 
but it is otherwise in equity. ' 

Same — In Equity 

A court of equity will dispense with the written evidence requir- 
ed by the statute when one of the parties has under certain con- 
ditions performed his part of the contract. j 
. ^^^ The equitable . rule has sopietimes been limited to contracts yO'^'^^^ 
v\*^' relating to an interest in land;** but "it is probably more ac- y 7*U ' 
curate to say that the doctrine of part performance applies to 
all cases in which a court of equity would entertain a suit for u» c~ 

Ts See Popp T. Swanke, 68 Wis. 364,. SI N. W. 916. Such are the statutes 
of Alabama, California, Michigan, Nevada, New Tork, Oregon, and Wisconsin. 
Bee ^Frauds, Statute of,** Deo, Dig. (Key-No.) M 119, 125; Oent. Dig. |S IIS, 

Tt Townaend ▼. Hargraves, 118 Mass. 825. Bee ^'Frauds, Statute of,** Dee. 
Dig. (Key-No.) If 119, 125; Cent. Dig. |§ US, 266-^7. 

T4 Chicago Attachment Co. v. Sewing-Mach. Co., 142 111. 171, 81 N. B. 438, 
15 L. R. A. 754; Henry v. Wells, 48 Ark. 485, 3 S. W. 637; Wheeler v. 
Frankenthal, 78 111. 124; Nally ▼. Reading, 107 Mo. 350, 17 S. W. 078; 

Brown v. Pollard, 89 Va. 606, 17 S. E. 6 ; Seymour r. Oelrichs, 156 Cal. 782, ^ ^ 

106 Pae. 88, 134 Am. St Rep. 154. The statute does expressly provide in 
Iowa, Alabama, and probably in other states, that certain acts of part per- 
formance shall take the contract out of the statute. Louisville & N. R. Co. 
▼. Philyaw, 94 Ala. 463, 10 South. 83 ; Price v. Lien, 84 Iowa, 590, 51 N. W. * 
52. See **Frauds, Statute of," Deo. Dig. (Key-No.) f 129; Cent. Dig. S§ 287- 
926. 

Ti BRITAIN Y. ROSSITER, 11 Q. B. Diy. 123, Throckmorton, Ca& Con- 
tracts, 8a And see Osborne y. Kimball, 41 Kan. 187, 21 Pae. 163 ; McElroy 

▼. Ludlum, 32 N. J. Eq. 828. As to contracts In consideration of marriage, 
see ante, p. 90. As to contracts not' to be performed within a year, see ante, 

Dl 99. See **Fraud9, Statute of,** Dec. Dig. (Key-No.) | 142; Cent. Dig. f S4S. 



116 ' BTATirrB or frauds (Ch. 4 

specific performance if the alleged contract had been in writ- 
ing.'' ^• 

Even in the case of contracts relating to land it is not enough 
that services have been rendered in consideration of an oral prom- 
ise to grant lands, nor that the price has otherwise been paid in 
whole or in part; for the acts relied upon as part performance 
"must be unequivocally, and in their own nature, referable to 
some such agreement as that alleged." '^ Where, however, the 
purchaser has taken possession ^* under an oral contract for the 

• 

▼•McManna t. Cooke, 80 G. D. 697, per Kay* J* See Anson, Cont (8th 
Ed.) 7a See '"Frauds, Statute of,*' Dec. Dig, {K&y-No.) i lit; Cent. Dig. 
i S4S. 

7T Maddlson t. Alderaon, 8 App. Gas. 479, 7 Q. B. Dlv. 174. In thla case 
a promise of a gift of land had been made to a persdu in consideration of 
her remaining in the serrice of the promisor during his lifetime. It was 
held that the continuance of the service for the required period could not be 
regarded as exclusively referable to the promised gift It might have rested 
en other considerations. And see Rogers ▼. Wolfe, 104 Mo. 1, 14 S. W. 805 ; 
Shahan ▼. Swan, 48 Ohio St 25, 26 N. B. 222, 29 Am. St Rep. 517 ; Smith 
T. Pierce, 65 Vt 200, 25 Atl. 1092. But see Brinton v. Van Cott, 8 Utah. 480, 
3S Pac. 218. That payment or part payment of the purchase money is not 
alone sufficient, see Glass ▼. Hulbert, 102 Mass., at page 28, 3 Am. Rep. 418; 
Brown t. Pollard, 89 Va. 696> 17 S. E. 6; Peckham y. Balch, 49 Mich. 179, 
IS N. W. 506; Boulder Valley Ditdh Min. & Mill. Go. t. Famham, 12 Mont 
1, 29 Pac. 277; Webster v. Gray, 37 Mich. 37; Nlbert t. Baghu^ 47 N. J. 
Bq. 201, 20 AU. 252 ; GrabiU t. Marsh, 38 Ohio St 331 ; Townsend t. Van- 
derwerker, 20 D. G. 197; Washington Brewery Go. t. Garry (Md.) 24 Atl. 
161; Horn t. Lnddlngton, 82 Wis. 78; Forrester t. Flores, 64 Gal. 24, 28 
Pac. 107; Gallagher v. Gallagher, 31 W. Va. 9, S. E. 297; Maxfleld v. 
West, 6 Utah, 327, 379, 23 Pac 754, and 24 Pac. 98; Humbert ▼. Brisbane, 
26 S. G. 506; Temple t. Johnson, 71 111. 13; Gronk y. Trumble, 66 IlL 428; 
Goddard ▼. Donaha, 42 Kan. 754, 22 Pac. 708. Gontra, where the price con- 
sisted of the dismissal of actions and marriage with a certain woman. Slin- 
gerland ▼. Slingerland, 89 Minn. 197, 39 N. W. 146. And see Barbour v. Bar- 
bour, 49 N. J. Eq. 429, 24 AtL 227. But marriage alone between the vendor 
and vendee is not su^lent^^eek v. Peek, 77 Gal. 106, 19 Pac 227, 1 L. R. 
^ A. 185, ii Am. St Rep. 244. It is otherwise where there has been fraud in 
^ (^ procuring the marriage. Id. Promise to devise land to the promisee's daugh- 
ter if he will allow the promisor to adopt her. Pond ▼. Sheean, 132 111. 312, 
23 N. E. 1018, 8 L. R. A. 414. Relinquishing of position by son-in-law, and 
living on land under agreement by father-in-law to give it to him. Welch 
▼. Whelpley, 62 Mich. 15, 28 N. W. 744, 4 Am. St Rep. 810. Delivery of deed 
as part performance. Luzader v. Richmond, 128 Ind. 344, 27 N. El 736; 
Swain V. Bumette, 89 Gal. 5G4, 26 Pac 1093. See "Frauds, Statute of," Dee. 
Dig. (KeV'No.) | 129; Cent. Dig. {§ 292, 307. 

T« Ais to what constitutes sufficient possession, see Hunt v. Lipp, 30 Neb. 
469, 46 N. W. 632 ; Emmel v. Hayes, 102 Mo. 186. 14 S. W. 209, 11 L. R. A. 
323, 22 Am. St Rep. 769 ; Neibert v. Baghurst (N. J. Gh.) 25 AU. 474 ; Swales 
V. Jackson, 126 Ind. 282, 26 N. E. 62 ; Gochran v. Ward, 5 Ind. App. 89, 29 
N. E. 795, 31 N. E. 581, 51 Am. St Rep. 229. See *'Fraud9, Statute of,*" Dec. 
Dig. (Key-No.) i 142; Cent. Dig. | S^S. 






(1 iA'^H^ 



{§ 60-51) EFFEcrr of nongomplianoi 117 

sale of land, and paid the purchase money or other considera- 
tion/* or made valuable improvements thereon,** equity will 
enforce performance on the part of the vendor. "The whole doc- 
trine rests upon the principle of fraud, and proceeds upon the 
idea that the party has so changed his situation, on the faith of 
the oral agreement, that it would be a fraud upon him to permit, 
the other party to defeat. the agreement by setting up the stat- 
ute. ♦ ♦ ♦ The change of situation necessary to create this 
equitable estoppel must, of course, have been made in reliance 
upon, and in pursuance of, the oral agreement, and so connected 
with the performance of the contract that, from the nature of 
the case, the defendant should understand it was done in reliance 
upon his agreement." ** Possession, to constitute such part per- 
formance as to warrant the interference of a court of equity, must 
have been under the contract,** and it must be accompanied by 

r* Bechtel y. Ck)ne, 52 Md. 698; Jamison t. Dtmock, 9S Pa. 62; Carney y. 
Carney, 05 Mo. 353, 8 S. W. 729 ; Watts y. Witt, 39 S. C. 356, 17 S. E. 822 ; 
Fitzsimmons y. AUen, 39 III. 440 ; Llpp y. Hunt, 25 Neb. 91, 41 N. W. 143 ; 
Gould y. Banking Co., 136 lU. 60, 28 N. E. 497 ; Denlar y. HUe, 123 Ind. 68, 
24 N. E. 170. Contra, Bradley y. Owsley, 74 Tex. 69, 11 S. W. 1052. Bet 
''Frauds, Statute ofr Dec. Dig, (Key-No.) § 129; Cent. Dig. || 318^21. 

•0 Potter y. Jacobs, 111 Mass. 32; Barrett y. Forney, 82 Va. 269; Cutsin- 
«er y. Ballard, 115 Ind. 93, 17 N. E. 206 ; Hunter y. Mllls^ 29 S. C. 72, 6 S. 
E. 907 : Wallace y. Scogglns, 17 Or. 476, 21 Pac^^ 558; H olmden y. Janes, 42 
Kan. 758. 21 Pac. 591; Moulton y. Harris, 94 CaX^420, 29 Pac. 706; Mudgett <^ C 
T. Clay, 5 Wash. 103, 81 Pac. 424 ; Hunkins y. Hunkins, 65 N. H. 96, 18 Atl. 
655 ; Union Pac. R. Co. y. McAlpine, 129 U. S. 305, 9 Sup. Ct 286, 32 L. Ed. 
673; Brown y. Sutton, 129 TJ. S. 238, 9 Sup. Ct 273, 32 L. Ed. 664; Mc- 
Whinne y. Martin, 77 Wis. 182, 46 N. W. 118; Morrison y. Herrick. 27 111. 
App. 339, afDrmed In 130 111. 631, 22 N. E. 537 ; Townsend y. Vanderwerker. 
160 V. S. 171, 16 Sup. Ct 258, 40 L. Ed. 383 ; Anderson y. Brewing Co., 173 
111. 213, 50 N. E. 655 ; Low y. Low, 17ar Mass. 580, 54 N. E. 257. See 
-Fnittd*, Statute oH' Dec. Dig. (Key-No.) § 129; Cent. Dig. f| 318-^21. 

•1 Brown y. Hoag, 35 Minn. 373, 29 N. W. 135, per Mitchell, J. See, also, 
Caton y. Caton, L. R. 1 Ch. App. 147 ; Semmes y. Worthington, 38 Md. 298 ; 
Wheeler y. Reynolds, 66 N. Y. 227 ; Sulliyan y. O'Neal, 66 Tex. 433, 1 S. W. 
185; Purcell y. Miner, 4 Wall. 513, 18 L. Ed. 435; Clark y. Clark, 122 lU. 
888, 13 N. E. 553 ; McLeod y. Hendry, 126 Ga. 167, 54 S. E. 949 ; Henderson 
V. Henrie, 68 W. Va. 562, 71 S. E. 172, 34 L. R. A. (N. S.) 628, Ann. Cas. 
1912B, 318; Seaman y. Aschermann, 51 Wis. 678, 8 N. W. 818, 37 Am. Rep. 
849. See '* Frauds, Statute of,'* Deo. Dig. {Keg-No.) f 129; Cent. Dig. | 307. 

•a Jacobs y. Railroad Co., 8 Cush. (Mass.) 224; Purcell y. Miner, 4 Wall. 
513, 18 L. Ed. 435 ; Ducie y. Ford, 138 U. S. 687, 11 Sup. Ct 417, 34 L, Ed. 
1091 ; Green y. Groves, 109 Ind. 519, 10 N. E. 401 ; Miller v. Ball, 64 N. Y. 
at page 292; Birkbeck v. Kelly (Pa. Sup.) 9 Atl. 313; Boozer y. Teague, 27 
8. C. 348, 3 S. E. 551; Mahana y. Blunt, 20 Iowa, 142; Messmore y. Cun- 
ningham, 78 Mich. 628, 44 N. W. 145; Pawlak y. Granowski, 54 Minn. 130, 

80 N. W. 831 : Clark y. Clark. 122 111. 388, 13 N. E. 553 ; Foster y. Maginnia, 
m Cal. 264, 26 Pac. 828. See, also, cases cited supra, note 77. Host there- 



118 BTATUTB OF FRAUDS (Ch. 4 

payment of the purchase fnoney, or by valuable and permanent 
improvements, l^erc possessiQOualQnc Js^Qt fillQUgll.*' 

It has frequently been said that improvements without pos- 
session are not sufficient ; *^ but, on the other hand, the making 
of valuable permanent improvements on the land by the vendee, in 
pursuance of the agreement, and with the knowledge of the other 
party, is always considered the strongest and most unequivocal 
act of part performance by which an oral contract to sell land 
is taken out of the statute; ** and the better opinion is that, if 
the vendee has no adequate remedy at law, such improvements 
are sufficient, even where not accompanied by possession, to justify 
a court of equity in granting specific performance of the con- 
tract." 

A few of the courts have refused to recognize the doctrine that 
part performance takes a contract out of the statute,*^ but the doc- 
trine is supported both in England and in this country by an over- 
whelming weight of authority. 

Compelling Execution of Writing 

In some states, courts of equity, in the exercise of their juris- 
diction to grant relief in case of fraud, have compelled the execu- 
tion of a written contract where the party sought to be charged 
had agreed to execute it, but afterwards fraudulently refused to 
keep his promise.** Other courts hold that refusal to execute a 

fore be taken after tbe making of the contract Wright ▼. Nalton, 219 Pa. 
253, 68 Atl. 707 ; Maloy ▼. Boyett, 63 Fla. 956, 43 South. 243. See *'Fraude, 
Statute of," Dec. Dig. (Key-No.) | 129; Cent, Dig. | 292. 

•* Glass y. Hulbert, 102 Mass. at page 82, 3 Am. Rep. 418; Hibbert t. 
Aylott's Heirs, 52 Tex. 530; Miller ▼. Bali, 64 N. Y. at page 292; Dougan y. 
Blocher, 24 Pa. 28; Moore y. Small, 19 Pa. 401; Galbreath y. Galbreath, 5 
Watts (Pa.) 146; Ann Berta Lodge No. 42, I. O. O. P., v. Leyerton, 42 Tex. 
at page 26. But see Andrew y. Babcock, 63 Conn. 109, 26 Atl. 715 ; Kenne- 
more y. Eennemore, 26 S. 0. 251, 1 S. E. 881. See "Frauds, Statute of,*^ 
Deo. Dig. {KevNo,) f 129; Cent Dig, H S03-326, 

•4 Wooldridge y. Hancock, 70 Tex. 18, 6 S. W. 8ia See "Frauds, Statute 
of;' Dec. Dig. {Key-No,) f 129; Cent. Dig. S§ 303^26, 

•sHenrlkson y. Henrlkson, 143 Wis. 314. 127 N. W. 962, S3 L. R. A. (N. 
S.) 534. And see Freeman y. Freeman, 43 N. Y. 34, 3 Am. Rep. 657 (sustain- 
ing gift of land upon eyidence of possession and Improvements). See 
"Frauds, Statute of:' Dec. Dig. {Key-No.) § 129; Cent, Dig. {{ 303-326, 

«• Henrikson y. Henrikson, 143 Wis. 314, 127 N. W, 902, 33 L. R. A. (N. S.) 
634. See "Speciflo Performance," Dee. Dig. {Key-No.) || 39-47; Cent. Dig. 
|§ 114-132, 

'•T Dunn y. ^oore, 38 N. O, 864; Ridley y. McNalry, 2 Humph. (Tenn.) 174; 
Beaman y. Buck, 9 Smedes & M. (Miss.) 207 ; Pass y. Brooks, 125 N. C. 129,. 
84 S. E. 228. See, "Frauds, Statute of,*" Deo. Dig. {Key-No.) | 129; Cent. 
Dig. il 287-326. 

•• Equitable Gaslight Co. of Baltimore City y. Manufacturing Co., 63 Md. 



S§ 50-61) EFFECT OF NONCOMPLIANOE . 119 

written contract as agreed is not such a fraud as will take the con- 
tract out of the statute.** 

Part Performance — Recovery Quasi ex Contractu \ ^ j 

Where one of the parties to an oral contract within the statute '^, 
of frauds pays money or performs services thereunder, of which* ^ ^ 
the other party has 'received the benefit, the law implies a promise, ,' / ' 
or rather imposes a duty upon him, to pay for the benefit con- , 
ferred; and an action may be maintained against him, not upoii i 
the contract, but upon the appropriate common counts in assump- 
sit, the measure of recovery being, not the agreed price, but the 
value of the benefit conferred.** 

The Contract as a Defense 

The provision that "no action shall be brought" on oral con- 
tracts within the statute not only prevents suit on such a contract, 

285; Baker t. Baker, 2 S. D. 261, 49 N. W. 10C4, 89 Am. St Rep. 776; Mc- 
Donald ▼. Yxmgbluth (a G.> 46 Fed. 83a In Iowa the court decreed specific 
performance of a parol agreement to assign a patent right, though Rev. St 
U. S. I 4898 [IT. S. Comp. St 1901, p. 3387], requires assignments to be in 
writing. Searle t. Hill, 73 Iowa, 367, 85 N. W. 490, 5 Am. St Rep. 68& Bee 
'*Praud$, Btatuie of," Deo. Dig. (Kev-No.) | 99; Cent. Dig, %% 11^-119. 

••Cay lor ▼. Roe, 99 Ind. 1; Jackson y. Myers, 120 Ind. 504, 22 N. E. 90, 
and 23 N. B. 86; Feeney t. Howard, 79 Cal. 525, 21 Pac. 084, 4 L. R. A. 826, 
12 Am. St Rep. 162; Safe Deposit & Trust Co. of Pittsburg y. Diamond Coal 
ft Coke Co., 234 Pa. 100, 83 Aa 54. And see Glass y. Hulbert, 102 Mass. 
80^ 3 Am. Rep. 41& Bee ''Fraude, Btatute of,'' Deo. Dig. {Key-No.) ^ S9; 
OmU. Dig. || 11^-119. 

••Dowling y. McKenney, 124 Mass. 478; Henrikson y. Henrikson, 143 Wis. 
814, 127 N. W. 962, 33 L. R. A. (N. S.) 634 ; Whipple y. Parker, 29 Mich. 369 ; 
Whitaker y. Burrows, 71 Hun, 478, 24 N. Y. Supp. 1011; Patten y. Hicks,- "X 
48 CaL 509. And see cases cited post, note 92. As to recovery of money ( 
or other consideration paid, see Welch y. Darling, 59 Vt 136, 7 AtL 547; ' ^ ' 
Herrick y. Newell, 49 Allnn. 198, 51 N. W. 819; Schroeder y. Loeber, 75 Md. 
195, 23 Ad. 579, and 24 AtL 226 ; Worth y. Patton, 5 Ind. App. 272, 31 N. E. 
1130; Nelson y. Improvem^t Co., 96 Ala. 515, 11 South. 695, 38 Am. St Rep. 
116. Recovery for services rendered, Cadman v. Markle, 76 Mich. 448, 43 N. 
W. 815, 5 L. R. A. 707; Sprague v. Haines, 68 Tex. 215, 4 S. W. 371; Ste- 
vens y. Lee, 70 Tex. 270, 8 S. W. 40 ; Hartwell v. Young, 67 Hun, 472, 22 N. 
Y. Supp. 486; Jeffery v. Walker, 72 Hun, 628, 25 N. Y. Supp. 161; Won- 
settler v. Lee, 40 Kan. 367, 19 Pac. 862 ; Springer v. Bien (Com. PI.) 10 N. Y. 
Supp. 530; Schoonover v. Vachon, 121. Ind. 8, 22 N. E. 777; Miller v. El- 
dredge, 126 Ind. 461, 27 N. E. 132; Taggart v. Tevanny, 1 Ind. App. 330, 27 
N. £. 511 ; Koch V. WUIIams, 82 Wis. 186, 52 N. W. 257 ; Stout's Adm'r v. 
Royston, 107 S. W. 784, 32 Ky. Law Rep. 1055; WUson v. Wilderness Poul- 
try Farm, 82 N. J. Law, 352, 82 Atl. 517. In Minnesota, inconsistently, the 
agreement fixes the value of the services rendered under it Kriger v. Lep- 
pel, 42 Minn. 6, 43 N. W. 484 ; Spinney v. Hill, 81 Minn. 316, ^ N. W. 116. 
Recovery of expenses incurred, or money paid for the use of the other partg^. 
Sprague v. Haines, G8 Tex. 215, 4 S. W. 371. Recovery for use and occu- 
pancy of land frpm one who has used it under a parol agreement which he 



120 BtATUTB OF FRAUDS (Ol 4 

but prevents such a contract from being set up as a defense/^ as 
for instance, in an action on the quantum meruit by a party who- 
has partly performed under it/' or in an action in ejectment 
against one in possession of land under an oral contract.** 

'Who may Plead the Statute 

The benefits of the statute of frauds are personal, and it can,, 
only be set up by the parties to the contract or their privies.** / 

Waiver of Statute 

A contract not put in writing, as required by the statute of 
frauds, not bein^ void, but simply unenforceable by suit, the fail- 
ure of the contract to comply with the statute may be waived by 
the party to be charged.** It is genera lly held to have been waived 
i f not pleaded. a s a defense, unless the complaint sh ows that th e 
case is within the st atute .*^ ~* '~' " 

refuses to carry out. Walker ▼. Shadcelford, 49 Ark. 508, 6 S. W. 887, 4 Am. 
St Rep. 61 ; post, p.' 660. Bee **Fraud8, Statute of,** Deo. Dig. {Key-No,) f- 
125; Cent. Dig, |f «W-«r7%. 

•1 Simons ▼. New Britain Trust Ck>., 80 Conn. 268, 67 Atl. 888, 11 Ann. Gas. 
477. See *'Fraude, Statute of,*; Dec^ Dig. (Key-No.) | Ul; Cent. Dig. § Si^. 

•'King ▼. Welcome, 6 Gray' (Mass.) 41; Baker r. Lauterbach, 68 Md. 64,. 
11 Atl. 704; McGinnis y. Femandes, 126 111. 228, 19 N. E. 44; Lemon ▼. 
Randall, 124 Biich. 687, 83 N. W. 994. See **Fraud8, Statute of,** Deo. Dig. 
(Key-No.) | HI; Cent. Dig. | S49. 

•> Zeuske ▼. Zeuske, SO Or. 66, 103 Pac. 648, 106 Pac. 249, Ann. Gas. 1913A,. 
556 (holding that the acts of part performance were available only in equity 
to take the case out of the statute). See **Fraude, Statute of^ Deo. Dig.. 
(Key-No.) | 14I; Cent. Dig. | SiS. 

•«Gahill Y. Bigelow, 18 Pick. (Mass.) 369; Mewbum's Heirs t. Bass, 82* 
Ala. 622, 2 South. 620; Briggs v. United States, 148 U. S. 346, 12 Sup. Gt. 
391, 36 L. Ed. 180; Dailey y. Kinsler, 35 Neb. 836, 63 N. W. 973; Best y. 
Davis, 44 111. App. 624; Grundies y. Kelso, 41 III App. 200; Houser y. La- 
mont, 55 Pa. 311, 93 Am. Dec. 755 ; Book y. Mining Ck>. (G. G.) 58 Fed. 106 ;. 
Bullion & Exch. Bank y. Otto (G. G.) 69 Fed. 256; Ghicago Dock Go. y. Kin- 
zi6» 49 111. 289 ; King y. Bushnell, 121 111. 656, 13 N. E. 245 ; St Louis, K. & 
N. W. R. Co. y. Glark, 121 Mo. 169, 26 S. W. 192, 906, 26 L. R. A. 751. See- 
''Frauds, Statute of,'* Dec. Dig. (Key-No.) § US; Cent. Dig. §§ 344-^50. 

•» Montgomery v. Edwards, 46 Vt 151, 14 Am. Rep. 618 ; Gosand v. Bun- 
ker, 2 S. D. 294, 60 N. W. 84; Westfall y. Parsons, 16 Barb. (N. Y.) 646; 
Nunez v. Morgan, 77 Gal. 427, 19 Pac. 753 ; Brakefield y. Anderson, 87 Tenn. 
206, 10 S. W. 360; Sarwell y. Sowles, 72 Vt. 270, 48 Atl. 11, 82 Am. St Rep. 
943. See ''Frauds, Statute of,*' Dec^ Dig. (Key-No.) | 144! Cent. Dig. f 351. 

••Wells y. Monihan, 129 N. Y. 161, 29 N. E. 232; McGlure y. Otrich, 118^ 
111. 320, 8 N. E. 784 ; Gosand v. Bunker, 2 S. D. 294, 50 N. W. 84 ; Espalla y. 
Wilson, 86 Ala. 487, 6 South. 867 ; Gozart y. Land Co., 113 N. G. 294, 18 S. B. 
337; Hamill y. Hall, 4 Colo. App. 290, 36 Pac 927. The statute must be- 
affirmatiyely pleaded. Birchell t. Neaster, 36 Ohio St 331; Crane y. Powell, 
139 N. Y. 379, 34 N. E. 911 ; Citty y. Manufacturing Ck).. 98 Tenn. 276, 24 S. 
W. 121, 42 Am. 8t Rep. 919. But some courts hold that it may be raise^^ 



J^^' 









I 52) OONTRAOTB WITHDf BBOTIOH 17 121 

ConAici of Laws 

By the rules of private international law the validity of a con- 
tract, so far as regards its formation, is determined by the lex loci 
-contractus; but the procedure, including the proof, in an action 
on a contract is governed by the lex fori. In a Jeading E nglis h 
•case, in which action was brouerht in England on a verbal co ntrac t 
made in France, a nd which was valid and enforceable by the 
French law, it was held that, as the statute of frauds did not go 
t o^the existence of th e contract^ but affected the procedure j)nly, 
and pr evented proof ^ t he statute of frauds governed the case, and 
prevented a recovery. *^ This case has been followed by the courts 
of some of our states, and has been approved by the federal su- 
preme court.** The courts of many other states, however, have 
held the contrary, and will enforce a contract so long as it is 
not within the statute of frauds of the state in which it was made, 
and, on the other hand, will refuse to enforce a contract which 
is not within their own statute, but is within the statute of the 
state in which it was made.** 




;151 



.~J'^ ' ^ '^ ''JaU^ * II 



SAME— CONTRACTS WITHIN SECTION 17 

32. IN GENERAL. The seventeenth section of the English stat- 
ute, which has been substantially followed in most of 
the states, enacts that "no contract for the sale of any 
. goods, wares or merchandises, for the price of £10 ster- 
lingy or upwards, shall be allowed to be good, except 

■ 

VDder a general denial. Fountalne y. Bush, 40 Minn. 141, 46 N. W. 465, 12 
Am. St Rep. 722; Hurt ▼. Ford, 142 Mo. 283, 44 S. W. 228, 41 L. B. A. 823 : 
Barrett V. McAUister, 33 W. Ya. 738, 11 S. E. 220. If the answer admits tbe 
eontract the statute must be pleaded. lyerson ▼. Cirkel, 56 Minn. 2d9, 67 N. 
W. 800; Barrett ▼. McAllister, supra. Bw "Frauds, Btatute of,** Deo. Dig. 
{KeV'No.) i 144; Omt. Dig. | 951. 

•TLeroux v. Brown, 12 C. B. 801. See "Frauds, Statute of,*" Dec. Dig. 
iKey-No.) § ISO; Cent. Dig. | 268. 

•s Downer t. Ghesebrough, 86 Conn. 89, 4 Am. Bep. 29; Hunt y. Jones, 
12 R. I. 266. 34 Am. Rep. 636 ; Prltchard y. Norton, 106 U. S. 134, 1 Sup. Ct 
102, 27 L. Bd. 104 : Heaton y. Eldridge, 66 Ohio St 87. 46 N. B. 638, 36 L. R. 
A. 817, 60 Am. St Bep. 737; Buhl y. Stephens (O. O.) 84 Fed. 922. See 
^•Frauda, Statute of;* Deo. Dig. {Key-Vo.) | 120; Cent, Dig. % 268. 

••Dacosta y. Dayls, 24 N. J. Law, 319; Cochran y. Ward, 6 Ind. App. 89, 
S9 N. E. 795, 81 N. B. 581. 51 Am. St Rep. 229; Denny y. WUliams. 5 Allen. 
<MaaflO 1 ; Allsbouse y. Ramsay. 6 Whart (Pa.) 331, 37 Am. Dec. 417 ; Hough- 
tallng y. Ball, 20 Mo. 663 ; Low y. Andrews, 1 Story, 38, Fed. Gas. No. 8.559 ; 
Miller y. Wilson, 146 IlL 523, 34 N. E. 1111, 37 Am. St Rep. 186. See 
^Frauds, Statute of,** Dec. Dig. (Key-yo.) | 120; Cent. Dig. | 268. 



122 8TATUTB OF FRAUDS (Ch. 4 

(a) '*The buyer shall accept part of the goods so sold, and actu- 

ally receive the same, 

(b) ''Or give something in earnest to bind the bargain, or in 

part payment, 

(c) "Or that some note or memorandum in writing of the said 

bargain be made and signed by the parties to be charged 
by such contract, or their agents thereunto lawfully au- 
thorized.** 

53. EXECUTORY SALE. The section applies to executory con- 

tracts to sell as well as to executed contracts of sale. 

54. WORK AND LABOR. It does not apply to contracts for 

work, labor, and materials, but a contract is not deemed 
to be one for work, labor, and materials, 

(a) In England and some states, where it contemplates the ulti- 
mate transfer of the property in a chattel for a price, al- 
though the chattel is to be made. 
' (b) In most jurisdictions, where the chattel, although to be 
made, is one which the seller ordinarily makes and sells 
in the course of his business. It is otherwise if it is one 
which must be specially manufactured. 

(c) In New York and some other states, where the chattel is 
in existence, although the seller is to adapt it to the use 
of the buyer. 



SAME— WHAT ARE GOODS, WARES, AND MERCHAN- 
DISES 

55. "Goods^wares^jand merchandises" comprehend: 

(a) All c orporeal movable property. 

(b) In the United States, generally (but not in England), incor- 

poreal property, such as shares, bonds, notes, etc. 

(c) Fn^ctus naturales and fructus industriales, where the owner- 

ship is not to pass until after severance. 

(d) Fructus industriales (perhaps) also where the ownership t 

to pass before severance. ^ 

The treatment of this section belongs more properly to a work On 
the law of sales, and the rules governing its application will be very 
briefly indicated.^ While it is a part of the statute law of most of 

1 See Tiffany, Sales, 85--SL 




§ 55) WHAT ABB GOODS, WARES, AND MBB0HANDI8ES 123 

the states, in others it has never been enacted or has been repealed, 
and is not now the law.* 

Although there was doubt in England, to remove which a special 
statute was enacted, it has been held with us that the statute ap- 
plies not only to executed contracts of sale, but also to executory 
contracts, as, for instance, where the goods are not specified, but 
are to be afterwards obtained by the seller, or selected and set apart > 

to the purchaser.* A^^ 

It also applies to sales at public auction as well as private sales; *^ i^^^~ 
and to contracts of barter or exchange.* ^ ' ^ 

A contract for the sale of goods is not taken out of the operation 
of the statute by the fact that there are other stipulations to which 
the statute does not apply.* The contract must be for the sale of 
goods, and a promise, therefore, by the seller of bonds or other 
goods to take them back is not within the statute. It is a promise 
to rescind the sale, not a promise to sell.^ So, also, a contract by 
which one of the parties is to purchase goods for the other 'at a 
certain price, the latter agreeing to receive and pay for them on de- 
livery, is a contract of agency, and not of bargain and sale, and is, 
therefore, not within the statute.* Nor is an oral agreement for a 
trading venture, by which one party agrees to account to the other 
for half the profits in consideration that the other shall bear half ' 
the losses, within the statute.* 

s It is not in force in Virginia, West Virginia, Kentucky, North Carolina, 
and other states. See Odom v. Clark, 146 N. C. 544, 00 S. B. 613. Bee 
**Fraud3, Statute of," Deo. Dig. (Key-No,) f 81; Cent. Dig. | HO. 

• Bennett t. Hull, 10 Jphns. (N. Y.) 864 ; Lamb ▼. Crafts, 12 Mete. (Mass.) 
353; Edwards ▼. Railroad Co., 48 Meu 379; Franklin v. Long, 7 GUI & J. 
(Md.) 407; Cason ▼. Cheely, 6 Ga. 554; Sawyer ▼. Ware, 36 Ala. 676; Me^ 
chanical Boiler-Cleaner Co. y. Kellner, 62 N. J. Law, 544, 43 Atl. 599. Bee 
*'Fraud$, Statute of," Dec. Dig. (Key-No.) H 8S^6; Cent. Dig, §§ Ut-lSl. 

4 Singstack's Bx'm ▼. Harding, 4 Har. & J. (Md.) 186, 7 AnL Dec 669. 
See, also, ante, p. 112. See ** Frauds, Statute of," Deo. Dig. {Key-No.) | 84; 
Cent. Dig, ff ISk-lSl. 

■ Franklin y. Matea Gk)ld Min. O)., 158 Fed. 941, 86 a C. A. 145, 16 L. R. 
A. (N. S.) 381, 14 Ann. CJas. 302. See **Fraud%, Statute of," Deo. Dig. (Key- 
No.) if 85-^; Cent. Dig. f| Ut-lSt. 

• Hanson y. Marsh, 40 Minn. 1, 40 N. W. 841. Bee **Fraude, Statute of," 
Dec Dig. (Key-No.) |i 89-^6; Cent. Dig. ff U2-161. 

T Johnston y. Trask, 116 N. Y. 136, 22 N. B. 377, 5 L. R. A. 630, 15 Am. St 
Rep. 394. See '^Frauds, Statute of," Dec. Dig. (Key-No.) % 84; Cent. Dig. if 
15^-161. 

» Hatch y. McBrien, 83 Mich. 159, 47 N. W. 214. See '^Frauds, Statute of," 
Dec. Dig. (Key-No,) i 84; Cent. Dig. U 15^-161. 

• Coleman y. Eyre, 45 N. T. 41; Green y. Brookins, 23 Mich. 48, 9 Am. 
Rep. 74. See **Fraud9^ Statute of," Dec, Dig. {Key-No^ | 84; Cent. Dig. || 
ISk-ieL 



I 

124 BTATUTB OF FBAUDS (Ch. 4 

Value 

In most states the statute fixes the value of the goods under this 
section at ,$S0 ; but 'in some the value is fixed at a greater or less 
amount, and in two, at least, all contracts of sale are within the 
statute. 

Where several articles, all of which together exceed, but no one of 
which alone reaches, the value specified in the statute, are pur- 
chased independently at different times, each purchase is a separate 
contract, and is not within the statute ; but it is otherwise if they 
are all purchased at the same time, in one and the same transac- 

tion." lc<^n^Ol^ 

Contracts for Work, Labor, and Materials 

A difHcult question has arisen where labor has to be expended on 
the thipg sold before the contract is executed, and the property 
transferred, as to whether the contract is for the sale of goods with- 
in the seventeenth section, or for work and labor, and therefore en- 
forceable if to be performed within a year, so. as not to be within 
the fourth section. The decisions on this question are not in accord. 

In England it is held that the contract is for a sale of goods if it 
contemplates the ultimate transfer of the property in a chattel. **If 
the cont ract be such that it will result in the sale of a chatte l." it 
was said in the leading English case, "the prbpeFtorm of action, if 
the employer refuses to accept the article when made, would be for 
not accepting. But if the work and labor be bestowed in such a 
manner as that the result would not be anything which could prop- 
erly be said to be the subject of sale, then an action for work and 
labor would be the proper remedy." ** 

The English rule has been followed to some extent in this coun- 
try,** but in most jurisdictions it has been rejected.** 

In some states it is held that a contract for the sale of something 
which the seller ordinarily makes and sells in the course of his busi- 
ness is a contract for the sale of goods, and not for work and labor, 
though he may not have the goods on hand, but may have to man- 
ufacture them; but, if the goods are not such as he ordinarily 
makes, and have to be specially manufactured for the buyer, ijie 

i« Baldey ▼. Parker, 2 Bam. & C. 37. Bee *'Fraud$, Statute of,'' Deo, Dig. 
{Key-yo,) I 85; Cent, Dig, | 141. 

11 Lee ▼. Griffin, 1 Best & S. 272. See **Fraud9, Statute of,** Deo, Dig, 
(Key-No,) | 83; Cent, Dig. §§ 141-153, 

i« Pratt y. MUler, 109 Mo. 78, 18 S. W. 965, 32 Am. St Rep. 036; BnrreU 
T. Hlghleyman, 83 Mo. App. 183. See "Fraudi, Statute of,** Deo. Dig. {Key- 
No.) I 83; Cent. Dig. |§ 147-153. 

i» See cases cited post, notee 14, 15. 




i 56) WHAT ABB GOODS, WASBS, AND MBBCHANBISB8 126 

contract is for work and labor.** This is commonly called the Mas- 
sachusetts rule and has been so generally adopted that it is some- 
times referred to as the American rule. 

By the New York rule, which also prevails in a few other states, a 
distinction is made between goods in existence when the contract 
is ihade and goods that have to be manufactured, and it is held that 
when the chattel is in existence the contract should be deemed one 
of sale, even though it may have been ordered from a seller who is 
to do some work upon it to adapt it to the uses of the purchaser. 
Such a rule makes but a single distinction, and that is between ex- { 
isting and nonexisting chattels.** ^'^^ / 

In some states this question is regulated by special provisions of / 7 "^ 
the statute.** . ^ 



Goods, Wares, and Merchandises 

In England the term "goods, wares, and merchandises** has been 
limited to corporeal movable property, and is held not to include 



\.C<y^ 



shares of stock, choses in action, and other incorporeal rights and y ^// 



property,** and the courts of some of our states have taken the ^ , ' 



14 HEINTZ y. BURKHARD, 29 Or. 55, 43 Pac. 866, 81 L. R. A. 508, 54 Am. 
8t Rep. 777, Throckmorton Ca& Ck>ntract8, 94. Goddard y. Blnney, 115 Mass. Ji/*-^ 
460, 15 Am. Rep. 112; Lamb y. Crafts, 12 Mete. (Mass.) 853; Mixer y. How- ' i\^ 
arth, 21 Pick. (Mass.) 206, 82 Am, Dec 256 ; Atwater y. Hough, 29 Conn. 509, / 7 ' 
79 Am. Dec. 229 ; Crockett y. Scrlbner, 64 Me. 447 ; Edwards y. Railroad Co., 
4d Me. 879 ; . Flimey y. Apgar, 81 N. J. Law, 267 ; Central Llth. & E. Co. y. C ^ 

Moore, 75 Wis. 170, 48 N. W. 1124, 6 L. R. A. 788, 17 Am. St Rep. 186; 
Brown & Haywood Co. y. Wunder, 64 Minn. 450, 67 N. W. 857, 82 L. R. A. 
693; Banscher y. Gies, 160 Mich. 502, 125 N. W. 420; Moore y. Camden Mar- 
ble 4 Granite Works, 80 Ark. 274, 96 S. W. 1063, 117 Am. St Rep. 87, 10 
Ann. Ca& 308. See, also, Mechanical Boiler-Cleaner Co. y. Kellner, 62 N. J. 
Law, 544, 43 AU. 599. See ** Frauds, Statute of;*' Deo. Dig. {Key-No.) i 83; 
Cent. Dig, f | W-ISS, 

IB Parsons y. Loncks, 48 N. T. 17, 8 Am. Rep. 617; Cooke y. Millard, 65 
N. Y. 352, 22 Am. Rep. 619; Deal y. Maxwell, 51 N. Y. G52; Higgins y. Mur- 
ray, 78 N. Y. 252; Alfred Sbrimpton & Sons y. Dworsky, 2 Misc. Rep. 123, 
21 N. Y. Supp. 461 ; Elchelberger y. McCauley, 5 Har. & J. (Md.) 213, 9 Am. 
Dec. 514 ; Roitch y. Long, 27 Md. 188. And see Wallace y. Dowling, 86 S. C. 
807, 68 S. B. 571, 188 Am. St Rep. 1054. A contract to paint a portrait is 
not within the statute. Turner y. Mason, 65 Mich. 662, 32 N. W. 840. See 
"Frauds, Statute of,** Dec. Dig, {Key-No.) | 8S; Cent, Dig, fi§ Ul-lSS. 

!• lifighell y. Dougherty, 80 Iowa, 480. 53 N. W. 402, 17 L. R. A. 755, 41 
Am. St Rep. 511. In some states the statute expressly excepts goods to be 
manufactured. Flynn y. Dougherty, 91 Cal. «69, 27 Pac. 1080. 14 T^. K A - nc 
230. See ^'Frauds, Statute of:* Dec. Dig. (Key-No.) §§ 81, 8S; Cent. Dig. H 
140, 147-15S. 

IT Humble y. Mitchell, 11 Adol. & E. 205. And see Pickering y. Appleby, 
Comyn» 354. See **Frauds, Statute of,** Dee. Dig. {Key-No.) § 82; Cent. Dig. 
U 143-14^. 



ij<i i^' n 



126 statutTb of frauds (Ch. 4 

same view.** In other states it is held that shares of stock; prom- 
issory notes, bonds, and the like, are "goods, wares, and merchan- 
dise." *• It has also been held that a sale of book accounts,** or 
of land scrip,** is within the statute, but not an agreement for sale 
of an interest in an invention before letters patent are obtained.** 
In some states the statute uses the words "personal property," and 
these would, of course, apply to choses in action.** In other states 
the statute expressly mentions choses in action. 

As we have already seen, "fructus industriales" are not an inter- 
est in land, within the fourth section.** They are chattels, but it 
is an open question whether they are "goods, wares, and merchan- 
dises," within the seventeenth section.** So, also, a sale of "fructus 
naturales," or the natural growth of land, not being of an interest 
in land where title is not to pass until after severance, is regarded 
as within the seventeenth section. Some courts, indeed, hold this 
to be so though title is to pass before severance.** The question, 
however, is intricate, and the authorities conflicting, and it cannot 
be properly treated at any length in an elementary work on con- 
tracts. 

i« Whlttexnore ▼. Gibbs, 24 N. H. 484; Vawter ▼. Griffin, 40 Ind. 593; 
Webb y. Railroad Ck)., 77 Md. 92, 26 Atl. 113, 39 Am. St Rep. 390. See 
**Fraud8, Statute ofr Dec, Dig. (Key-No.) | 82; Cent. Dig. %% U^Ut 

i^Tlsdale v. Harris, 20 Pick. (Mass.) 9; Boardman ▼. Gutter, 128 Mass. 
388; BALDWIN ▼. WILLIAMS, 3 Mete (Mass.) 365, Throckmorton Gas. Gon- 
tracts, 92 ; Gooch t. Holmes, 41 Me. 523 ; Hudson y. Weir, 29 Ala. 294 ; Pray 
y. Mitchell, 60 Me. 430; North y. Forest, 15 Gonn. 400; Hinchman y. Lin- 
coln, 124 U. S. 38, 8 Sup, Gt 369, 81 L. Ed. 337 ; Bernhardt y. Walls, 29 Mo. 
App. 206; Greenwood y. Law, 55 N. J. Law, 168, 26 Atl. 184, 19 L. R. A. 
688; Meehan y. Sharp, 151 Mass. 564, 24 N. B. 907; Sprague y. Hosie, 155 
Mich. 30, 118 N. W. 497, 19 L. R. A. (N. S.) 874, 130 Am. St Rep. 558. Bee 
**Fraud8, Btatute of;* Dee. Dig. {Key-No.) f 82; Cent. Dig. §f 14S-U6. 

»o Walker y. Supple, 54 Ga. 17a Bee "Frauds, Statute of,** Deo. Dig. (Key- 
No.) § 82; Cent. Dig. |§ 14S-U6. 

«i Smith y. Bouck, 33 Wis. 19. Bee **Frand8, Btatute of," Dec. Dig. (Key- 
No.) i 82; Cent. Dig. || U3-U6. 

as Somerby y. Buntin, 118 Mass. 279, 19 Am. Rep. 459; Blakeney y. Goode, 
80 Ohio St 350. But see Jones y. Reynolds, 120 N. Y. 213, 24 N. E. 279. Bee 
**Fraud8, Btatute of,** Deo. Dig. (Key-No.) § 82; Cent. Dig. H 149-1^6. 

<B Southern Life Ins. & Trust Go. y. Gole, 4 Fla. 359. Bee **Fraud9, Btat» . 
ute of;* Dec. Dig. (Key-No.) | 82; Cent. Dig. §{ US-IJ^S. 

»4 Ante. p. 94. ^ 

SB See Tiffany, Sales, 4S, and cases cited. >• Ante, p. 04. 




I 66) ACOBFTANOB AND BBOBIFT 127 



SAME^ACCEPTANCE AND RECEIPT ' 

^6. To satisfy this exception there must be both 

(a) Acceptance^ which in this country means assent by the buy- 

er that the goods are to be taken by him in performance 
of the contract, and 

(b) Receipt, or the taking of possession of the goods by the buy- 

er with the seller's consent, either by actual delivery or by 
agreement* 

Acceptance and receipt are distinct, and to satisfy this excep 
both arc essential.*^ Acceptance may precede receipt,** or vice 
versa,** and both may be subsequent to the contract of sale.** 
Their effect is to prove that there is a contract, the terms of which 
may then be proved by parol.* ^ Accepta nce and receipt of a^rt, 
however small, is sufiicient .** 

Acceptance 

Acceptance, as the meaning imports, is an assent by the buyer, 
meant to be final, that the goods are to be taken by him under and 

ST Smitb T. Hudson, 6 Best & S. 481 ; Caulklns v. Hellman, 47 N. Y. 449, 7 
Am. Rep. 461 ; Cooke ▼. Millard, 65 N. T. 352, 867, 22 Am. Rep. 619 ; Max- 
well y. Brown, 89 Me. 9d, 63 Am. Dec. 603 ; Patterson & Holden ▼. Sargeant, 
Osgood & Roundy Co., 83 Vt 516, 77 Aa 338, 138 Am. St Rep. 1102. See 
-FftM«d«, Statute of,** Dec. Dig. (Key-No,) |S 89, 90; Cent, Dig. || 16S--n9. 

s« Cnsack ▼. Robinson, 1 Best 4 S. 299; Cross t. O'Donnell, 44 N. Y. 661, 
4 Am. Rep. 721 ; Knight t. Mann, 118 Mass. 143, 145 ; Simpson y. Krnmdlck, 
28 Minn. 352, 355, 10 N. W. 1& See "Frauds, Statute of,** Dec. Dig. (Key- 
No,) |§ 89, 90; Cent. Dig. || 165-179. 

>• Beanmont y. Brengeri, 5 C. B. 301 ; Garfield t. Paris, 96 tJ. S. 557, 563. 
24 L. Ed. 821 ; Vincent y. Germond, 11 Johns. (N. Y.) 283 ; Jones y. Reynolds. 
120 N. Y. 213, 24 N. E. 279; Townsend y. Hargrayes, 118 Mass. 325, 332 
See "Frauds, Statute of,** Deo. Dig. (Key-No.) |i 89, 90; Cent. Dig. |i 165- 
179. 

•«Gaalt y. Brown, 48 N. H. 183, 188, 2 Am. Rep. 210; McKnight y. Dun- 
lop, 5 N. Y. 537, 55 Am. Dec. 370; Marsh y. Hyde, 3 Gray (Mass.) 331; Bush 
y. Holmes, 53 Me. 417; McCarthy y. Nash, 14 Minn. 127 (Gil. 95); Gabriel 
y. Kildare Eleyator Co., 18 Okl. 318, 90 Pac. 10, 10 L. R. A. (N. S.) 638, 11 
Ann. Cas. 517. Bee "Frauds, Statute of," Dec Dig. (Key-No.) H 89, 90; 
Cent. Dig. |S 165-179. 

ti Tomkinson y. Straight, 17 C. B. 697; Garfield y. Paris, 96 U. S. 557, 566, 
24 L. Ed. 821. See "Frauds, Statute of,*" Dec Dig. (Key-No.) |i 89, 90; Cent. 
Dig. U 165-179. 

*> Garfield y. Paris, supra ; Damon y. Osbom, 1 Pick. (Mass.) 476, 11 Am. 
Dec. 229 ; Patterson & Holden y. Sargeant, Osgood & Roundy Co., 83 V t 516, 
77 AtL 838, 138 Am. St Rep. 1102. See "Frauds, Statute of,"* Dec Dig. 
iKey-No.) |f 89, 90; Cent. Dig. H 165-179. 



128 STATUTB OF FRAUDS (C3l. 4 

in performance of the contract.** If the contract is for sale of spe- 
cific goods, acceptance necessarily takes place when the contract is 
entered into.** If the contract* is for sale of goods which are not 
specific, there can be no acceptance until the seller has indicated 
what goods he intends to deliver, and thereafter an acceptance may 
be shown by the buyer's declarations,** or by any dealing with 
them as owner.** A mere examination of the goods, however, for 
the purpose of ascertaining whether they comply with the terms of 
an express or implied warranty of the contract of sale does not con- 
stitute an acceptance.*^ In England a highly artificial construc- 
tion has in the later cases been put upon "acceptance," and it is 
held that any dealing with the goods which recognizes a pre-exist- 
ing contract of sale is an acceptance,** but this later construction 
has never been adopted in the United States. 

Actual Receipt 

Where acceptance is shown, a very liberal construction is placed 
on actual receipt. Receipt implies delivery, and must be with the 
seller's consent, and with the intention of transferring possession 
to the buyer as owner, ^hfi t^'^t is whpthftr the selle r has parte d 
with his lien .** When the goods are to be forwarded to the buy- 

s* Caulkins t. Hellman, 47 N. Y. 449, 7 Am. Rep. 461 ; Meehon y. Sharp, 
151 Mass. 564, 24 N. E. 007 ; Smith y. Fisher, 59 Vt 63, 7 Atl. 816 ; Garfield 
y. Paris, 96 U. S. 567, 24 L. Ed. 821. See "Fraud9, Statute of," Deo. Dig, 
{Key-No,) § 89; Cent. Dig. |f 165-179. 

s« Cases dted supra, note 28. 

s» Oaulkins y. Hellman, 47 K. T. 449, 7 Am. Rep. 461 ; Shepherd y. Pressey, 
32 N. H. 49 ; Schmidt y. Thomas, 75 Wis. 529, 44 N. W. 771 ; Gal\in y. Mae- 
Kenzle, 21 Or. 184, 27 Pac. 1039. It Is sometimes said that mere words ar« 
not enough, but the cases in which such statements occur generally Inyoly^ 
simply the proposition that they are not enough to constitute acceptance and 
receipt Shindler y. Houston, 1 N. Y. 261, 49 Am. Dec. 316. See Tiffany, 
Sales, 56. See **Frauds, Statute of,"" Deo. Dig. (Key-No.) % 89; OmU, Dig. {{ 
165-173. 

86 Chaplin T. Rogers, 1 East 195; Phillips y. Ocmulgee Mills, 65 Ga. 633; 
Bacon V. Eccles, 48 Wis. 227, 238; SuUivan y. Sullivan, 70 Mich. 583, 38 
N. W. 472; Patterson & Holden y. Sargeant, Osgood & Roundy Co., 83 Vt 
516, 77 AU. 338, 138 Am. St Rep. 1102. See **Fraud€, Statute of,** Deo. Dig. 
(Key-No.) § 89; Cent. Dig. §§ 165-173. 

«T KEMENSKY y. CHAPIN, 193 Mass. 500, 79 N. E. 781, 9 Ann. CaS. 1168, 
Throckmorton Cas. Contracts, 97. See *'Frauds, Statute of" Dec. Dig. (Key- 
No.) i 89; Cent. Dig. {§ 165-173. 

««Page V. Morgan, 15 Q. B. Div. 228; Taylor v. Smith [1893] 2 Q. B. 65. 
See **Fraud9, Statute of,*' Dec. Dig. (Key-No.) § 89; Cent. Dig. §§ 165-173. 

»• PhilUps y. Bristolll, 2 Bam. & C. 511 ; Safford y. McDonough, 120 Ma» 
290; Marsh y. Rouse, 44 N. Y. 643; Hinchman y. Lincoln, 124 U. S. 38, 8 
Sup. Ct 369, 31 L. Ed. 337. See **FraudB, Statute of,** Dec. Dig. (Key-No.) | 
90; Cent. Dig. §§ 162-179. 

^•- J : :' : ■ ■ 



§ 56) ACC£PTANCB AND BBGEIPT 129 

er, if they arc carried by the seller's servant or agent, there is no 
transfer of possession while they remain in his hands ; ^^ but if they 
are forwarded by a carrier designated by the buyer, an actual re- 
ceipt takes place when they are delivered to him for carriage;** 
and if they are forwarded by common carrier, he, in the absence 
of special agreement, is the agent of the buyer and the result isjthe 
same.** The receipt of the goods by the carrier in such cases, on 
the other hand, is not an acceptance, such an agent having author- 
ity only to receive, and not to accept.** 

The possession of the goods may be transferred, and an actual » 

receipt take place by agreement, without physical delivery. An C^ 
actual receipt takes place by agreement: (1) When the goods are^^ a/^ 
in the actual possession of the seller, if he becomes bailee of the ^ y-'^ ( 
goods for the buyer; **.^2) when the goods are in the custody of i^ ^^ 
^ ^/'"'"Uic buyer, as bailee of the seller, if with the consent of the seller , / 

^ he ceases to hold as bailee, and holds them as owner; ** (3) when ^ -^ ' ' 
^ //^ the goods are in the custody of a third person as bailee of the seller, 

if such third person, with the consent of the seller and the buyer, \ t ^ 
A^vv becomes bailee of the buyer;** and (4) when the goods are not 

^Z/OlIc *• Agnew v. Dumas, 64 Vt 147, 23 AtL G34 ; Grey t. Cary, 9 Daly (N. Y.) 
863. Bee *'*Fraud8, Statute of,'* Deo, Dig. (Key-No,) | 89; Cent Dig, |i 165- 

ns. 

41 Bullock ▼. Tschergl (G. G.) 4 McGrary, 184, 13 Fed. 345; Gross v. 0*Don- 
nell, 44 N. T. 661, 4 Am. Rep. 721. See cases infra, note 43. Bee "Fraudi, 
Statute of," Dec. Dig. (Key-No,) | 90; Cent. Dig, || 16Z^119. 

*2 Wait ▼. Bal^r, 2 Ex. 1 ; Wilcox SUver Plate Co. v. Green, 72 N. T. 17 ; 
Sarbecker t. State, 66 Wis. 171, 26 N. W. 541, 56 Am. Rep. 624. See ''Frauds, 
Statute of,** Dee. Dig. (Key-No.) f 90; Cent. Dig. |i leZ-llQ. 

«s KEMENSKY ▼. CHAPIN, ld3 Mass. 500, 79 N. E. 781, 9 Ann. Gas. 1168, 
Throckmorton Gas. Contracts, 97; Hanson v. Armitage, 5 Bam. & Aid. 657; 
Hunt y. Hecht, 8 Ex. 814; Allard v. Greasert, 61 N. Y. 1, 5; Fontaine y 
Bash, 40 Minn. 141, 41 N. W. 465, 12 Am. St Rep. 722. See ''Frauds, Stat- 
ute of;* Dec. Dig. (Key-No.) i 90; Cent. Dig. §| 16t-179. 

44 Elmore ▼. Stone,. 1 Taunt 458; Beaumont y. Brengeri, 5 G. B. 301; 
Green y. Merriam, 28 Vt 801 ; Rodgers y. Jones, 129 Mass. 420 ; Webster y. 
Anderson, 42 Mich. 554, 4 N. W. 288, 36 Am. Repw 452. See "Frauds, Statute 
of,** Dec. Dig. (Key-No.) | 90; Cent. Dig. |i 162-179. 

4ftEdan y. Dudfield, 1 Q. B. 306; Lilly white y. Deyereux, 15 Mees. & W, 
285 ; Snider v. Thrall, 56 Wis. 674, 14 N. W. 814 ; Godkin y. Weber, 154 Mich. 
207, 114 N. W. 924, 117 N. W. 628, 20 L. R. A. (N. S.) 49a 

But the mere fact that the goods are in the possession of the purchaser 
at the time of the sale does not of itself constitute such a receipt and ac- 
ceptance as will satisfy the statute, unless it is so agreed by the parties, or 
the sale Is followed by acts of ownership on the part of the purchaser. J. H. 
Silkman Lumber Co. t. Hunholz, 132 Wis. 610, 112 N. W. 1081, 11 L. R. A. 
(N. S.) 1186 and note, 122 Am. St Rep. 1008, 13 Ann. Gas. 713. See "Frauds, 
Statute of,"* Dee. Dig. (Key-No.) | 90; Cent. Dig. || 162-179. 

4«Bentall ▼. Bum, B. & G. 423; Farina ▼. Home, 16 Mees. & W. 119; 

Clark Cont.(3d Ed.)— 9 



130 8TATUTB OF FRAUDS (Ch. 4 

in the custody of any person, as timber at a public wharf, or logs 
floating in a river, and the buyer and the seller agree that the pos* 
session is transferred/^ 



SAME— EARNEST AND PART PAYMENT 

EARNEST* Earnest is something of value given and received 
to mark the final assent of the pcurties to the bargain. 

58. PART PAYMENT. Part payment may be made at or (luiless 
the statute otherwise requires) subsequently to the time of ^ 
the contract, either in money or anything of value. 

Earnest is money or some gift or token delivered to mark the as- 
sent to the bargain.** The practice of giving earnest was former- 
ly prevalent in England, and, as the term was originally used, it 
was regarded as distinct from part payment** Now, however, the 
custom of giving something aside from a part of the purchase mon- 
ey "to bind the bargain" has fallen into disuse, and the word 
"earnest" is commonly interpreted as synonymous with part pay- 
ment. ** 

Part payment may be subsequent to the contract,** unless, as in 

soine states, the statute provides that it must be given at the time 

..-of the contract** It must be accepted.** It need not be money, 

' ^^townsend ▼. Hargraves, 118 Mass. 325, 332; Basaett y. Camp. 54 Vt 232. 
fifec *'Frau(l%, Btatuteof;' Dec. Dig, (Key-No,) I 90; Cent. Dig. |f 1&^179. 

*T Tansley ▼. Turner, 2 Bing. N. C. 151 ; Cooper v. BUI, 3 H. & C. 722 ; 
Leonard y. Davis, 1 Black, 476, 17 L. Ed. 222; Boynton v. Yeazie, 24 Me. 
286 ; Kingsley ▼. White, 57 Vt 565 ; Brewster ▼. Lelth, 1 Minn. 56 (Gil. 40). 
fifee '^Frauds, Statute o/," Deo. Dig. (Key-No.) § 90; Cent. Dig. H 162-179. 

*« Brae. 1, 2, c. 27. 

«• Benj. Sales (6th Am. Ed.) | 189; Howe t. Smith, 27 Ch. D. 89, 101. See 
**Fraud8, Statute of,*' Dec. Dig. (Key-No.) f 94; Cent. Dig. | 182. 

BO Howe ▼. Hay ward, 108 Mass. 54, 11 Am. Rep. 306; Groomer y. McMil- 
lan, 143 Mo. App. 612, 128 S. W. 285. See **Fraud8, Statute of,*" Deo. Dig. 
(Key-No.) ^ 94; Cent. Dig. | 182. 

81 Walker y. Nussey, 16 Mees. & W. 302; Thompson y. Alger, 12 Mete. 
(Mass.) 428, 435 ; Marsh y. Hyde, 3 Gray (Mass.) 331. See **Fraud3, Statute 
of,** Deo. Dig. (Key-No.) | 95; Cent. Dig. || 183-185. 

sa Hunter y. Wetsell, 67 N. Y. 375, 15 Am. Rep. 508; Id., 84 N. Y. 549, 38 
Am. Rep. 544; Jackson y. Tupper, 101 N. Y. 515, 5 N. B. 65; Kerkhof y. 
Paper Co., 68 Wis. 6.74, 32 N. W. 766; Gabriel y. midare Elevator Co., 18 
Okl. 318^ 90 Pac. 10, 10 L. R. A. (N. S.) 638, 11 Ann. Caa. 617 ; FrankUn y. 
Matoa Gold Mln. Co., 158 Fed. 941, 86 C. C. A. 145, 16 L. R. A. (N. S.) 381, 14 
Ann. Cas. 302 (Colorado Statute). See ^Frauds, Statute of,"* Deo, Dig. (Key- 
No.) f 95; Cent. Dig, %% 18S-185. 

••Edgerton y. Hodge, 41 Vt. 676. See •'Frauds, Statute of,** Dec. Dig, 
(Key-No.) | 95; Cent. Dig. {§ 18S-185. 



§ 59) FORM B£QUIBED 131 

but may be anything of value, which by mutual agreement is given 
and accepted on account or in part satisfaction of the price.*^ It 
may, for example, be in the form of a credit on indebtedness of the 
seller.'* But whatever is relied upon to constitute payment must 
be accepted as absolute payment, and the delivery of a check does 
not constitute payment unless it is agreed by the parties that it is 
to be accepted as absolute, and not merely as conditional pay- 
ment** 



SAME— FORM REQUIRED 

59. The rules as to the form required by section 17 are the same 
as in case of section 4, except that the consideration of the 
promise of the party to be charged need not appear* 

The note or memorandum is sufficient if it comply with the rules 
already stated with reference to the form required by section 4. 
It is not necessary, however, that the consideration of the promise 
of the party to be charged be stated ; in other words, if the memo- 
randum contains his promise, it need make no reference to the 
promise of the other party.*^ So if a letter or memorandum in the 
form of an offer states the terms of the proposed contract, the ac- 
ceptance need not repeat the terms,** and indeed may even be made 
orally.** But the price is a material part of the bargain, and must 

»* Wlilte T. Drew, 66 How. Praa (N. T.) 53 ; Weir ▼. Hudnut, 116 Ind. 
626, 18 N. B. 24.^ Sarrender of seUer's note, Sharp ▼. Carroll, 66 Wis. 62, 27 
N. W. 8S2; transfer of UU or note* Griffiths ▼. Owen, 13 Meea. & W. 68; 
under statute requiring payment at time, delivery of check. Hunter t. Wet- 
8^1, 84 N. T. 649, 88 Am. Bep. 644. See **Praud9, Statute of,'' Deo. Dig. 
i^ey-No.) I 9S; Cent. Dig. U 185-185. 

«■ Johnson t. Tabor, 101 Miss. 78, 67 South. 366. Bee **Fraud$, Statute 
oA* Dec. Dig. (Key-No.) { 95; Cent. Dig. H J85'185. 

■« Groomer r. McBiillan, 143 Mo. App. 612, 128 S. W. 286. See ** Frauds, 
Statute of,'' Dec^ Dig. {Key-No.) % 95; Cent. Dig. i| ISS-ISS. 

»T Edgerton t. Mathews, 6 East, 307; Sari v. Bourdillon, 1 0. B. N. S. 188; 
Smith T. Ide, 8 Vt 290 ; Williams ▼. Robinson, 73 Me. 186, 40 Am. Rep. 352. 
Bee "Fraudi, Statute of," Dee. Dig. {^ey-No,) { lOS; Cent. Dig. if 192-208. 

•• Jennings v. Shertz, 46 Ind. App. 120, 88 N. B. 729. Bee "Frauds, Stat- 
ute of," Dec Dig. (Key-No.) H 108, lit; Cent. Dig. %% tlJh221, 2S8. 

■• Reuss T. Plcksley, L. R. 1 Ex. 842 ; Sanborn t. Flagler, 9 Allen (Blass.) 
474; Justice t. Lang, 42 N. Y. 493, 1 Am. Rep. 676; Gradle t. Warner, 140 
lU. 128v 29 N. B. 1118 ; Kessler ▼. Smith, 42 Minn. 494, 44 N. W. 794. Bee 
Fronde, Statute of," Dee. Dig. {Key-No.) | lOS; Cent. Dig. ff 192-t08. 



•• 



132 BTATUTB OF FRAUDS (Ch. 4 

be stated/* though if it be not agreed upon, but is implied^ a mem- 
orandum which states no price is sufficient.*^ 



SAME— EFFECT OF NONCOMPLIANCE 

60. As in case of section 4, it is generally held that failure to com- 
ply with the provisions of section 17 does not render the 
contract void, but merely prevents its enforcement. 

This section declares that, if there be no acceptance and receipt, 
no earnest or part payment, and no note or memorandum, the con- 
tract' shall not ''be allowed to be good" thus differing from sec- 
tion 4, which merely declares that no action shall be brought. In 
England it seems not to have been directly decided whether these 
words mean that the contract shall be utterly void, or merely in- 
capable of being sued upon, as in ease of contracts under section 
4; and the dicta of the judges are conflicting. The latter position 
is sustained by the weight of. opinion.*' In Massachusetts, where 
the statute provided that no such contract should be "good or val- 
id/' it has been held that the difference in the wording of the two 
sections was immaterial, and that failure of a contract to comply 
with the requirements of section 17 does not go to its existence, 
but merely renders it unenforceable by suit, as under tl]e fourth 
section.** In Missouri, however, it has been held that section 17 
goes to the very existence of the contract.** In some states the 
statute declares that the contract shall be "void.'* 

•0 KGMENSKY ▼. OHAPIN, 198 Mass. 500, 79 N. E. 781, 9 Ann. Cas. 1168, 
Throckmorton Cas. Contracts, 97 ; Elmore ▼. Klngscote, 6 B. & C. 683 ; Ash- 
croft ▼. Butterworth, 136 Mass. 611 ; Stone ▼. Browning, 68 .N. T. 698 ; Han- 
son ▼. Marsh, 40 Minn. 1, 40 N. W. 841; Glasgow Billllhg Co. t. Burgher, 122 
Mo. App. 14, 97 S. W. 930. Bee "Frauds, Statute of,^ Deo. Dig. (Key-No.) f 
112; Cent Dig, f 2S8, 

•1 Hoadley ▼. McLaine, 10 Bing. 482 ; Ashcroft t. Morrison, 4 M. & G. 450. 
See "* Frauds, Statute of;* Dec. Dig. (Key-No.) | 112; Cent. Dig. | 2S8. 

•s Anson, Cont (4th Ed.) 67; Pol. Cont. 605. 

•sTownsend v. Hargrayes, 118 Mass. 325; Walner ▼. Insurance Co., 153 
Mass. 336, 26 N. B. 877, 11 L. R. A. 598. See, also. Bird t. Munro'e, 66 Mew 
337, 22 Am. Rep. 671; ante, p. 114, See ''Frauds, Statute of," Deo. Dig. 
(Key-No.) f 125; Cent. Dig. |§ 275-4^77^. 

•4 Honghtaling v. Ball, 20 Mo. 663. See, also, Green v. Lewis, 26 XJ, C. Q. 
B. 618. See '^Frauds, Statute of;* Dec Dig. (Key-No.) i 125; Cent. Dig. i| 
875-277%. 



8§ 61-62) 



CONSIDBBATION 



123 



CHAPTER V 

CONSIDERATION 

Cl,e2L Oolifllderatlon Defined. 

68, M. Neceflsity foi^ Gonslderatloii, and PresamptloB. 

66, 66. Adequacy of Consideration. 

67. Sufficiency or Reality of Consideration. 
68>70. Mutual Promises — Mutuality. 

71-78. Forbearance to Bzerdse a Right 

74-76. Doing What One is Bound to Do. ' 

77, 78. Impossible and Vague Promises. 

79. Legality of Consideration. 

80. Consideration in Respect of Time— Past Consideration. 



CONSIDERATION DEFINED 

61. Consideration is that which moves from the promisee, or to the 

promisor, at the express or implied request of the latter, 
in retun^ for his promise. 

62. As the term is used in the law of contract, it means a "valuable*' 

consideration; that is, something having value in the eye 
of the law. It may consist either in ''some right, interest, 
profit, or benefit accruing to one party, or some forbear- 
ance, detriment, loss, 6r responsibility given, suffered, or 
undertaken by tiie other.'* 

The law requires every simple contract to be based on what^ 
deems a valuable consideration. We shall take up in turn the dif- 
ferent forms which consideration may assume, and explain at length 
what is deemed a consideration.* At the* outset, however, it will 
be well to explain in a general way what we mean when we speak 
of the consideration for a promise. Consideration means that 
which moves from the promisee, or to the promisor, at the latter's 
request, in return for his promise. Consideration "is something 
done, forborne, or suffered, or promised to be done, forborne, or 
suffered by the promisee in respect of the promise." ' If, for in- 
stance, one man, by paying another a sum of money, procures a 
promise from the latter in return to do something for his benefit, 
the money paid is the consideration for the promise. Considera- 

1 For tlie history of consideration, the student sbould read Anaon, Cont 
(8th Ed.) 43; Poll. Cont 179; Holmes, Com. Law, 263-271, 284-287. 
* Anson. Cont (8th Ed.) 74. 



134 CONSIDERATION (Ch. 5 

tion, however, need not be the payment of money. As usually de- 
fined, it may consist "in some right, interest, profit, or benefit ac- 
cruing to one party, or some forbearance, detriment, loss, or re- 
sponsibility given, suflfered, or undertaken by the other ;*' • provid- 
ed, however, the benefit conferred or detriment suffered is deemed 
of value in the eye of the law.* Strictly speaking, however, the ac- 
crual of a right or benefit to the promisor is not necessary to estab- 
lish a consideration, and the one essential test in all cases is that of 
forbearance^ detriment, or responsibility suffered or undertaken by 
the promisee.* 

If a person does work for another on the latter's express or im- 
plied promise to pay for it, or gives another permission to use his 
property in return for a promise, or gives up his right to sue an- 
other, on the latter's promise to pay money or do some other act, 
there is in each case either a benefit accruing to the promisor, or a 
detriment suffered by the promisee, or both ; and this is the consid- 
eration for the promise. So, also, if a person promises another to 
do something on the latter's promising him to do something, as 
where one man promises another to sell him goods, and the prom- 
isee promises to buy them, and pay for them, a right is conferred 
by each to the benefit of the other's promise, and a responsibility is 
undertaken by each. The promise of each is the consideration for 
the promise of the other.* 

The fact that the benefit conferred or detriment suffered is 

• Currie ▼. Mlsa, L. R. 10 Exch. 162. See, also, Bainbridge t. rirmstone, 6 
Adol. & E. 743 ; Handrahan v. 0*Regan, 45 Iowa, 298 ; Devecmon v. Shaw, 69 
Md. 199. 14 Ati. 464, 9 Am. St Rep. 422; HAMER ▼. SIDWAY, 124 N. T. 
638. 27 N. E. 256, 12 K R. A. 463, 21 Am. St Rep. 693, Throckmorton Cas. Con- 
tracts, 100 ; Byrne v. Cummlngs, 41 Bilss. 192 ; Day t. Gardner, 42 N. J. Eq. 
199, 7 Atl. 365; Wolford ▼. Powers, 85 Ind. 294, 44 Am. Rep. 16; Sanders 
V. Carter, 91 Ga. 450, 17 S. E. 345; Dorwin v. Smith, 35 Vt 69; Train v. Gold, 
5 Pick. (Mass.) 380; Emerson v. Slater, 22 How. 43, 16 L. Ed. 860; Taylor 
V. WilUams, 120 Ind. 414, 22 N. B. 118; Marshalltown Stone Co. v. Manu- 
facturing Co., 114 Iowa, 574, 87 N. W. 496; Gunther ▼. Gunther, 181 Mass. 
217, 63 N. E. 402; Presbyterian Board of Foreign Missions t. Smith, 209 Pa. 

361. 58 AtL 689. And see the old cases of Traver v. (1667) 1 Sid. 57 ; 

Paynter v. Chamberlyn (1639) 1 Rolle, Abr. 22 ; Hawes v. Smith (1675) 2 Lev. 
122. See "Contracts;' Deo. Dig. (Kev-No,) H 50^2; Cent. Dig. %% 222^24, 

* Post, p. 14a 

* Henry t. Dussell, 71 Neb. 691, 99 N. W. 484, And see Pollock, Cont 166; 
HAMER V. SIDWAY, 124 N. Y. 538, 27 N. B. 256. 12 L. R. A. 463, 21 Am. St 
Rep. 693, Throckmorton Cas. Contracts, 100. See ^'Contractif** Deo. Dig. (Key- 
No.) §S 50-^2; Cent, Dig, S§ 222-224. 

• Funk V. Hough, 29 HL 145; Earle ▼. Angell, 157 Mass. 294, 82 N. E. 164. 
And see post, p. 145, See **Contracts,*' Dec Dig. (Key-No.) f 56; Cent, Dig, fS 
S4h^5S. 



§§ 61-62) CONSIDERATION DEFINED 135 

slight does not render it any the less a valuable consideration.^ 
The naming of a child after a person will support his promise to 
pay a large sum of money.* 

Consideration Distinguished from Motive 

"Motive is not the same thing with consideration. Considera- 
tion means something which is of value in the eye of the law, mov- 
ing from" the promisee.* Confusion between motive and consider- 
ation has, however, sometimes arisen, and has taken two forms: 
(1) The distinction which once existed between "good" and "valu-^ 
able" consideration; and (2) the view which once maintained that 
a moral obligation was sufficient to support a promise. 

Same — Good Consideration 

Natural afiFection for a near relative, or, as it is generally said, 
the consideration of blood, or natural love and affection, is said to 
be a "good," but not a "valuable," consideration.** In the law of 
contract the consideration must be "valuable." In some early 
English cases it was attempted to ingraft the doctrine of good con- 
sideration, which had been applied in cases of covenants to stand 
seised, upon the law of contract, but it was not allowed. The mere 
existence of natural affection as a motive for a promise has prob- 
ably never been held to amount to a valuable consideration, so as 
to support an executory contract** 

T State V. Baker, 8 Md. 44. Bee ""Contracte,** Deo. Dig, (Key-No.) | 54; Cent. 
Dig. S 1i4B. 

• Wolford T. Powers, 65 Ind. 294, 44 Am. Rep. 16; Diffeaderfer t. Scott, 5 
Ind. App. 243, 32 N. B. 87; DaUy v. Mlnnlck, 117 Iowa, 563, 91 N. W. 913, 
60 L. R. A. 840. See ''Ooniraetir Deo, Dig, (Key-No.) { 54; Cent. Dig. S 251. 

• Thomas t. Thomas, 2 Q. B. 85L See, also, PhUpot t. Grunlnger, 14 WaU. 
570, 20 L. Ed. 743. See **Contract$,'' Deo. Dig. (Key-No.) i 50; Cent. Dig. { 
222. 

10 Chit Cont 27. ''A good consideration Is such as that of blood, or of 
natural love and affection, when a man grants an estate to a near relation ; 
being founded on motives of generosity, pmdence, and natural duty. A 
valuable consideration la such as money, marriage, or the like, which the law 
esteems an equivalent given for the grant, and Is therefore founded In mo- 
tives of justice. Deeds made upon good consideration only are considered as 
merely voluntary, and are frequently set aside in favor of creditors and bona 
fide purchasers." 2 Bl. Ck)mm'. 297. 

11 Bret V. J. & and Wife, Gro. Eliz. 755; Fink r. Cox, 18 Johns. (N. X.) 
145, 9 Am. Dec. 191 ; Prlester r. Prlester, Rich. Eq. Ca& (S. G.) 26, 18 Am. 
Dea 191; Klrkpatrick ▼. Taylor, 43 IlL 207; Smith v. Klttridge, 21 Vt 238; 
Phillips T. Frye, 14 AUen (Mass.) 36 ; Pennington v. Glttings, 2 GiU & J. (Md.) 
208 ; Dugaii ▼. Glttings, 3 GUI (Md.) 138, 43 Am. Dea 306 ; Whltaker v. Whit^ 
aker, 62 N. X. 368, 11 Am. Rep. 711 ; Gotton v. Graham, 84 Ky. 672, 2 S. W. 
647; Hadley v. Reed, 68 Hun, 608, 12 N. X. Supp. 163; Williams v. Forbes, 
114 la 167, 28 N. E. 463 ; Wilbur v. Warren, 104 N. X. 196. 10 N. B. 263. See 
-Contracii,'* Dec Dig. CKey-No.) | 77; Cent. Dig. fS 286-290. 



136 ' CONSIDBBATIOM (Ch. 5 

It was formerly held that if a person for whose benefit a binding 
promise was made was nearly related to the promisee, the rela- 
tionship and the fact that the contract was prompted by natural af- 
fection would give a right of action to the beneficiary. This excep- 
tion to the rule that a contract cannot confer rights upon a person 
who is not a party to it is no longer generally recognized.^* The 
question of the right of a third person who did not furnish the con- 
sideration to sue upon a promise made for his benefit will be con- 
sidered in discussing the operation of contract.** 

Same— Moral Obligation 

There are some cases to the effect that a mere moral obligation is 
sufficient consideration to support a promise,** but it is now well 
settled to the contrary.** A man may believe himself to be under 
a moral obligation, either because he has received actual benefits in 
the past, or from motives of piety, delicacy, or friendship. Ndw, a 
past consideration, as will be seen,** is in truth no consideration at 
all, for the promisor does not receive a benefit, nor the promisee 
suffer a detriment, in return for the promise. There are certain 
exceptions to this statement, which will be noticed in treating of 
past consideration, but it will be seen that the validity of the prom- 
ise in th6se cases does not properly rest on the basis of moral obli- 
gation, though some courts put it upon that ground. The insuffi- 
ciency of past benefits to support a promise on the ground of moral 
obligation was settled in England in a case in which it was said : 
"The doctrine would annihilate the necessity for any consideration 

»• Post, p. 444. *• Post, pp. 442-452. 

1* Hawkes y. Saunders, Cowp. 289; Lee v. Muggeridge, 5 Taunt 36; Olark 
Y. Herring, 5 Blnn. (Pa.) 36 ; Glass v. Beach, 5 Vt 173 ; State v. Reigart, 1 
Gill (Md.) 1, 39 Am. Dec. 628; Drury t. Briscoe, 42 Md. 162; Musser v. Fer- 
guson Tp., 55 Pa. 475; In re Sutch's Estate, 201 Pa. 305, 50 Atl. 943. And 
■ee Brown y. Latham, 92 Ga. 280, 18 S. B. 421 ; Lawrence v. Oglesby, 178 111. 
122» 52 N. B. 945. See post, p. 175. See *'Contraet8," Dec Dig. (Key-No.) | 
76; Cent. Diff. K 857-381. 

IB Eastwood Y. Kenyon, 11 AdoL ft E. 438; Mills y. Wyman, 8 Pick. (Mass.) 
20r ; Beaumont y. Reeye, 8 Q. B. 483 ; Ehlc^ y. Judson, 24 Wend. (N. Y.) 97 ; 
Oook Y. Bradley, 7 Conn. 57, 18 Am. Dec. 79; Valentine y. Foster, 1 Mete. 
(Mass.) 520, 35 Am. Dec. 377; Updike v. Titus, 13 N. J. Eq. 151; Farnham y. 
O'Brien, 22 Me. 475 ; Shepard y. Rbodes, 7 R. I. 470, 84 Am. Dec. 573 ; Gay 
Y. Botts, 13 Bush (Ky.) 299; Cobb y. Cowdery, 40 Vt 25, 94 Am. Dec. 370; 
Osier y. Hobbs, 38 Ark. 215; McElven y. Sloan, 56 Ga. 208; Trimble y. Rudy, 
60 S. W. 650, 22 Ky. Law Rep. 140G, f>3 L. R. A. 353, and note. A promise by 
a husband to his wife on her deathbed that their son should ha Ye certain 
property is not a Yaluable consideration for a conveyance from the father 
to the son. Peek y. Peek, T7 Cal. 106, 19 Pac 227, 1 L. R. A. 185, 11 Am. St 
Rep. 244. See post, p. 175, note 88. See "Contracts," Dec. Dig. (Key-No.) 8 
76; Cent. Dig. §§ S57-S81. 

!• Post, p. 170. 



§§ 63-64) NECBSsmr for oonsideration, anp frssuhptiok 137 

at all, inasmuch as the njiere fact of giving a promise creates a moral 
obligation to perform it." *^ 

If the actual receipt of a benefit in the past does not constitute 
consideration for a subsequent promise, still less will such duties 
of honor, conscience, or friendship as a man may conceive to be 
incumbent on him. A man may be bound in honor to pay money 
lost in a wager, but, inasmuch as the law has declared wagers to 
be void, a promise to pay such a debt would be unenforceable for 
want of a consideration.** In like manner, a pious wish on the 
part of executors to carry out the intentions of the testator is no 
consideration for promises made by them.^* 



NECESSITY FOR CONSIDERATION, AND PRESUMPTION 

63. NECESSITY — ^A valuable consideration is es sential to the ya> 

l idity of every simple contrac t. 

EXCEPTION — Want of consideration does n ot avoid a nego - 
tiable instrument in the hand s of a bona fide^u rchaser few 

value. 

^^^^^^^"^^ 

64. PRESUMPTION— Negotiable insftruments arc by the law 

merchant deemed prima facie to have been issued for a 
valuable consideration; and by statute in some jurisdic- 
tions the same is true of all other simple contracts in writ- 
ing, a nd of contracts under seal in thos e jurisdiction s where 
the comn^on-law effect of a sea l has Jjcnj^?^!?.^^- 

Consideration is the universal requisite of all contracts not un- 
der seal, except the so-called "contracts of record," which, like con- 
tracts under seal, derive their validity from their form alone.** 

IV Eastwood ▼. Kenyon, 11 Adol. ft B. 43& 

i» Morris V. Norton, 76 Fed. 912, 21 C C. A. 668. See **Cantraci9;* Deo. Dig. 
(^ey-No.) i 76; Cent. Dig. %% 357^59; '*0am4nff,'' Dec. Dig. (JSCey-No.) I 19; 
Cent: Dig. H S9-U. 

i» Anson, Cont. (4th Ed.) 70; Thomas ▼. Thomas, 2 Q. B. 861. See ^'Con- 
tracU;* Dec. Dig. (Key-No.) I 76; Cent. Dig. ff 557-^81. 

soRANN y. HUGHES, 7 Term R. 346, Throckmorton Gas. Gontracts, 84; 
Cooke T. Oxiey, 3 Term R. Go3; Burnet t. Bisco, 4 Johns. (N. T.) 235; Doeh- 
ler V. Waters, 30 Ga. 344 ; Lowe v. Bryant, 32 Ga. 235 ; OuUahan t. Baldwin, 
100 CaL 646, 36 Pac 310 ; Branson v. Kltchenman, 148 Pa. 641, 24 Atl. 61 ; 
McLean t. McBean, 74 111. 134 ; Baer v. Chrisdan, 83 Ga. 822, 9 8. E. 790 ; 
Bailey v. Walker, 29 Mo. 407 ; Hendy ▼. Kler, 69 Gal. 138; Culyer r. Banning, 
19 Minn. 303 (GU. 260) ; In re James, 78 Hun, 121, 28 N. T. Snpp. 902. See 
^^Contraete," Deo. Dig. {Key-No.) t 47; Cent. Dig. Jf 220, ttl, tSS-^tSM. 



138 CON8IDBRATIOH (Ch. 5 

The rule applies to all simple contracts,** including those contracts 
which arc required to be in writing, either by the statute of frauds, 
or by other statutes, or by the common law. It was at one time 
doubted whether a promise not under seal needed a consideration 
if it was put in writing,** but the necessity for a consideration was 
affirmed and settled in England in 1778 in a suit against an admin- 
istratrix who, without consideration, had promised in writing to an- 
swer damages out of her own estate. It was contended that the 
writing required by the statute of frauds rendered consideration 
unnecessary, but the contrary was held. "It is undoubtedly true," 
it was said, "that every man is by the law of nature bound to ful- 
fill his engagements. It is equally true that the law of this country 
supplies no means nor affords any remedy to compel the perform- 
ance of an agreement made without sufficient consideration. Such 
agreement is 'nudum pactum ex quo non oritur actio ;' and, what- 
ever may be the sense of this maxim in the civil law, it is in the 
last sense only that it is to be understood in our law. ♦ ♦ ♦ All 
contracts are, by the law of England, distinguished into agreements 
by specialty, and agreements by parol; nor is there any such third 
class, as some of the counsel have endeavored to maintain, as con- 
trarcts in writing. If they be merely written, and not specialties, 
they are parol, and a consideration must be proved." ■• 

Negotiable Instruments 

Bills of exchange, promissory notes, and other negotiable instru- 
ments are to some extent an exception to this rule. 

As between the immediate parties to the instrument considera- 

>i Cooley T. Moss, 123 Ga. 707, 61 S. B. 025, holding that a written contract 
signed by the parties Is not binding on a party as to whom It la without con- 
sideration. The guaranty of another's debt must be supported by a consid- 
eration. In these contracts there are two considerations — a consideration for 
the original contract, and a consideration for the (niaranty. See Brlggs t. 
y^t^f'", 86 Kan. 205, 18 Pac. 120. If, however, as we have seen, a note, f6r 
Instance, Is guarantied by a third person before its delivery to the payee, 
the consideration from the payee to the maker Is sufficient to support the guar- 
anty as well as the note. Wlnans v. Manufacturing Co., 48 Kan. 777, 30 Paa 
163 ; Heyman v. Dooley, 77 Md. 162, 26 AU. 117, 20 L. R. A. 257. Bee '^Otm- 
traou;' Deo. Dig, (Key-No.) f 47; Cent. Dig, %% 220, 221, 256-^58. 

s* Plllans V. Van Mierop (A. D. 1765) 8 Burrows, 1663. See "Oontracte,^ 
Deo. Dig, (Kev-yo.) S 47; Cent. Dig, fii 220, 221, 256-258. 

asRANN v. HUGHES, 7 Term R. 350, Throckmorton Gas. Gontracts, 84. 
See, also, Gook v. Bpadley, 7 Gonn. 57, 18 Am. Dec. 79 ; In re Hess* Estate, 
150 Pa. 346, 24 Atl. 676; Brown v. Adams, 1 Stew. (Ala.) 61, 18 Am. Dec. 36; 
Burnet v. Blsco, 4 Johns. (N. Y.) 235; Perrlne v. Gheeseman, 11 N. J. Law, 
174, 19 Am. Dec. 388; Train ▼. Gold, 5 Pick. (Mass.) 380; Eddy r. Roberts, 
17 lU. 505. Bee '"CtrntraoH;' Deo. Dig. (Keu-No.) { 47; Cent Dig. H 220, 221, 
256-^58. 



§g 63--64) NECESSITY FOB 0ON8IDEBATION, AND PBESUMFTION 139 

tion is necessary. Consideration, however, is said to be presumed 
— ^that is, the instrument itself is prima facie evidence of considera- 
tion ; but the defendant may introduce evidence in rebuttal of the 
presumption, and if he can show that no consideration was given 
for his making or indorsement of the instrument his promise fails.** 
The rule is the same when the party suing is a subsequent holder, 
unless he is a purchaser for value before maturity without notice, 
in which case want of consideration is not a defense.'* 

Gratuitous Employment 

"The promise of a gratuitous service, although not enforceable 
as a promise, invo)ves a liability to use ordinary care and skill 
in performance"; '• or, as it is usually put, the promisee is not liable 
for nonfeasance, but is liable for misfeasance, and this is sometimes 
said to be another exception to the rule that consideration is neces- 
sary to the validity of every simple contract. The ground of this 
liability is somewhat obscure. Where a person delivers over prop- 
erty to a bailee or agent, it is perhaps possible to find a considera- 
tion in the detriment which the bailor or principal suffers in parting 
with control.*' But in the mere case of gratuitous service or 
agency, this element of consideration, if such it be, does not exist. 
It is sometimes said that the trust and confidence reposed is a suf- 
ficient consideration,** but if this were so it would be a sufficient 
consideration for the promise to perform, and render the promisee 
liable for nonfeasance. It must be admitted that the liability in 
these cases arises independently of any consideration to support the 
undertaking. Whether this liability is to be regarded as an anom- 
aly in the law of contract *• or as arising independently of con- 
tract •• need not be considered. 

Statutory Presumption of Consideration 

In some states, statutes have been enacted declaring that all writ- 
ten instruments shall be presumptive evidence of a consideration, 
rebuttable, however, by showing that there was in fact no consid- 

S4 Norton, BUls & N. (8d Ed.) 27a ti id. 27a 

*• Anson, Contr. (8th Ed^ 76, 83. See, also, WUklnson v. Coyerdale, 1 Esp. 
75; Thome v. Deas, 4 Johns. (N. Y.) 84; Walker v. Smith, 1 Wash. C. O. 152, 
Fed. Cas. No. 17,086 ; Williams ▼. Higglns, 30 Md. 404 ; Passano ▼. Acosta, 4 
La. 26, 23 Am. Dec. 470; Spencer y. Towles, 18 Mich. 9; Isham v. Post, 141^ 
N. T. 100, 35 N. E. 10S4, 23 L. R. A. 90, 38 Am. St Rep. 76a See "ContractBy 
Dee. Dig, {Key-No.) i 61; Cent, Dig. %% 252, 25S. 

ST Cogga y. Bernard, 2 Ld. R. 909 ; Whitehead v. Greetham, 2 Ring. 464. 
See ''Oontracta,*' Deo. Dig. (Keg-No.) f 62; Cent. Dig. H 260-272. 

It Hammond t. Hnssey, 51 N. H. 40, 12 Am. Rep. 41. See "Contracta/* Dec 
Dig. (Key-No.) % 64; Cent. Dig, H 2SS^S5, 291-^15. 

tt Alison, Contr. (8th Ed.) 85. 

•t *«Grataltoii8 Undertakings,** bj Joseph H. Beale, Jr., 5 Hair. L. R. 222. 



140 CONSIDBBATION (Ch« & 

eration, thereby putting all simple contracts in writing, to this ex- 
tent, on a level with negotiable instruments.** The statutory chang- 
es in the law in respect to instruments under seal have already 
been referred to.** 



ADEQUACY OP CONSIDERATION 

65. The validity of the contract is not dependent upon the adequacy 

of the consideration, provided it is something o£ value in 
the eye of the law.** 

66. In equity, inadequacy of consideration, if such as to be evidence 

of fraud, is ground for refusing specific performance ; and 
. inadequacy of consideration is regarded as corroborative 
evidence in suits for relief from contracts on the ground 
of fraud and undue influence. 

In General 

At law the benefit conferred or detriment suffered by the prom- 
isee in exchange for the promise need not be equal to the responsi- 
bility assumed by the promisor ; or, in other words, the consideration 
need not be adequate. Any real consideration, however small, will 
support a promise.** So long as a man gets what he has bargained 
for, and it is of some value in the eye of the law, the courts will not 
ask what its value may be to him, or whether its value is in any 
way proportionate to his act or promise given in return, for this 
would be "the law making the bargain instead of leaving the par- 
ties to make it." *• In a case in the supreme court of the United 
States, Mr. Justice Story said, in speaking of a guaranty of anoth- 
er's v debt, made in consideration of one dollar: "A valuable con- 
sideration, however small or nominal, if given or stipulated for in 

•1 There are sucb statutes in California, Indiana, Iowa, Kansas, Kentucky, 
Missouri, and possibly In other statea 

«« Ante, p. 73, 

as Anson, Oont (8th Ed.) Td. 

•* Presbyterian Board of Foreijm Missions ▼. Smith, 209 Pa. 361, 58 Atl. 
680; Wolford v. Powers, 85 Ind. 294, 44 Am. Rep. 16. See ^'Contracts*' Dee. 
Dig, (KeV'No,) { 69; Cent. Dig, §{ Wi, 2S2, 

. «6Piiklngton Y. Scott, 15 Mees. & W. 660; Worth v. Case. 42 N. T. 362; 
Hubbard v. Coolidge, 1 Mete. (Mass.) 84 ; Brooks v. Ball, 18 Johns. (N. T.) 337 ; 
Nash V. Lull, 102 Mass. 60. 8 Am. Rep. 435 ; Earl v. Peck, 64 N. T. 596 ; Dor- 
win V. Smith, 85 Vt 69; Boggs v. Wann (C. C.) 58 Fed. 681; Eyre v. Potter, 
15 How. 42, 14 L. Ed. 592 ; Grandin v. Grandln, 49 N. J. Law, 508, 9 Atl. 756, 
60 Am. Rep. 642; Grum ▼. Sawyer, 132 111. 443, 24 N. E. 956; Mlnneapolli 
Land Co. t. McMillan, 79 Minn. 287, 82 N. W. 591 ; Blgelow t. Bigclow, 95 
Me. 17, 49 Atl. 49; Caaserleigh v. Wood, 119 Fed. 308, 56 C. a A. 212. See 
•"Contracts:* Dec, Dig. {Key-No,) % 5S; Cent. Dig. S$ 2S1, 2S2. 



II 65-66) ABEQUAOT OF CONSIDERATION 141 

good faith, is, in the absence of fraud, sufficient to support an ac- 
tion on any parol contract. ♦ ♦ ♦ A stipulation in considera- 
tion of one dollar is just as effectual and valuable a consideration as 
a larger sum stipulated for or paid." •• 

Forbearance by a creditor, for instance, to levy an executipn on 
the debtor's property, will support a promise by the debtor or by 
a third person to pay a larger sum than could have been recovered 
under the execution. "If," said Lord Tenterden in such a case, 
^'the inconvenience of an execution against these goods at the time 
in question was so great that the defendant thought proper to bu^ 
it off at such an expense, I do not see that the consideration is in- 
sufficient for the promise." "^ 

There may even be a consideration without the accrual of any 
benefit at all to the promisor. If the promisee has suffered any 
detriment, however slight, or, though he has suffered no real detri- 
ment, if he has done what he was not otherwise bound to do, in 
return for the promise, he has given a consideration ; and the court 
will not iisk whether the promisor was benefited.** Where, for 
instance, the owner of boilers gave another permission to weigh 
them on the latter's promise to return them in good condition, the 
permission and advantage taken of it was held, a sufficient consid- 
eration for the promise. "The defendant," said the court, "had 
some reason for wishing to weigh the boilers, and he could do so 
only by obtaining permission from the plaintiff, which he did ob- 
tain by promising to return them in good condition. We need not 
inquire what benefit he expected to derive. The plaintiff might 
have given or refused leave." ■• 

So where the defendant had made the promise sued upon in con- 
sideration of the plaintiffs' surrender of a guaranty which had been 
given by the defendant, but which turned out to have been unen- 
forceable because it was within the statute of frauds, the surrender 
was held a sufficient consideration for the promise. "Whether or 

•• Lawrence r. McGalmont, 2 How. 426, 11 L. Ed. 326. And see Appeal of 
Ferguson. 117 Pa. 426, 11 AtL 886. See **C<mtraciM;* Deo. Dig, {Key-No.) f 
SS; Cent. Dig. H ^91, 232. 

SY Smith ▼. Algar, 1 Bam. & Adol. 608. See *'Pontract8,*' Deo. Dig. (Key- 
No.) S 71; Cent. Dig. U 295-298, 816-^24. 

»• Traver v. , 1 Sid. 57 ; Chick v. Trevett, 20 Me. 462, 37 Am. Dec. 68; 

Fisher v. Bartlett, 8 Greenl. (Me.) 122, 22 Am. Dec. 225 ; Hind y. Holdship, 2 
Watts (Pa.) 104, 26 Am. Dee. 107; Glasgow ▼. Hobbs, 32 Ind. 440; Gates y. 
Bales, 78 Ind. 2S5 ; DOTLB y. DIXON, 97 Mass. 208, 93 Am. Dea 80, Throck- 
morton Gas. Ck>ntracts, 72; Gobb V. Gowdery. 40 Vt 26, 94 Am. Dea 370; 
Hall Mfg. Co. y. Supply Co., 48 Mich. 331, 12 N. W. 206. See "ContraoU,*' Dec. 
Dig. (Key-No.) f 52; Cent. Dig. Sf 223, 224. 

M Bainbridge t. Firmstone, 8 AdoL & BL 743. See "Contraete^^ Dee. Dig. 
{Key-No.) i S4; Cent. Dig. H 233-255. 



142 CONSIDERATION (Ch. 5 

• 

no the guaranty could have been available," said the court, "the 
plaintiffs were induced by the defendant's promise to part with 
something which they might4iave kept, and the defendant obtained 
what he desired by means of that promise." *• 

On this principle, the refraining by a person from the use of liq- 
uor and tobacco for a certain time at the request of another has 
been held a sufficient consideration for a promise by the latter to 
pay him a sum of money.*^ So also, where a person traveled for 
his own pleasure and benefit at the request of another, this was 
held sufficient to support a promise by the latter to reimburse him 
for his expenses;** and, where an executor forbore to act as such 
on his coexecutor's promise to divide commissions with him, the 
forbearance was held a consideration for the promise.** It has 
even been hfeld that the liability incurred in purchasing property 
upon the faith of a promise made by another to contribute a certain 
sum in part payment of the price is a sufficient consideration to 
make the promise binding;** and where a person agreed to con- 
tribute a sum of money for the purpose of discharging a mortgage 
on church property, on condition that the church would raise the 
balance by voluntary subscription, and the church performed the 
condition, it was held that the promise became binding.** 

«<» Haigb V. Brooks. 10 Adol. A El. 809. And see Judy ▼. Louderman, 48 
Ohio St. 562, 29 N. K 181 ; Churchill v. Bradley, 58 Vt 403, 5 Atl. 189, 56 Am. 
Rep. 5G3; Sykes v. Chadwlck, 18 Wall. 141, 21 L. Ed. 824; Merchant ▼. 
O'Rourke, 111 Iowa, 861, 82 N. W. 759. Contra : McCollum v. Edmonds, 109 
Ala. 322, 19 South. 501, and Grimes v. Grimes, 89 S. W. 548, 28 Ky. Law Rep. 
549; the former holding that the surrender of a worthless land certificate, 
and the latter that the destruction of a worthless note of a third party, does 
not constitute a valid consideration. See "Contracts" Deo, Dig, {Key-So,) S 
54; Cent, Dig. if 291^15, 

*i HAMEB V. SID WAT, 124 N. Y. 538, 27 N. B. 256, 12 L. R. A. 463. 21 
Am. St Rep. 693, Throckmorton Cas. Contracts, 100; Talbott ▼. Stemmons' 
Ex*r, 89 Ky. 222. 12 S. W. 297, 5 L. R. A. 856. 25 Am. St Rep. 531 ; Lindell ▼. 
Rokes, 60 Mo. 249, 21 Aju. Rep. 395. Bee " Contract $,** Dec. Dig, (Key-No,) S 
54; Cent, Dig, % 248. 

4» Devecmon v. Shaw, 69 Md. l99. 14 Atl. 464, 9 Am. St Rep. 422. See, also, 
Hoshor V. Kautz, 19 Wash. 238, 53 Pac 51. See '"Contracts," Deo, Dig, (Key- 
No,) S 54; Cent, Dig, | 2SG. 

48 OhlendorfP v. Kanne. 66 Md. 495, 8 Atl. 351. See, also, John y, John, 
122 Pa. 107, 15 Atl. 675. See "Contracts," Dec. Dig, (Key-No.) S 54; Cent. 
Dig, §§ 253-255, 352; "Executors and Administrators," Deo, Dig, (Key-No.) i 
19; Cent, Digi, f 38, 

44 Steele v. Steele, 75 Md, 477, 23 Atl. 959; Skldmore v. Bradford, I* R. 8 
Eq. 134. See "Contracts," Dec. Dig. (Key-No.) S 66; Cent, Dig, § 241, 

4* Roberts v. Cobb, 103 N. Y. «00, 9 N. E. 500. See '* Subscriptions," Dec. 
Dig, (Key-No.) f 15; Cent. Dig. SS i^-i7. 



§§ 65-66) ADVQUAOT OF OONSIDEBATION 143 

Marriage b a valuable consideration for a promise/* and mutual 
promises to marry are a consideration each for the other.*^ 

We have seen, in discussing contracts under seal, that want of 
consideration may be shown notwithstanding the seal, where the 
contract is in partial restraint of trade. The fact, however, that a 
contract is in partial restraint of trade forms no exception to the 
doctrine that adequacy of consideration cannot be inquired into.^* 

Exception in Exchange of Fixed Values 

The doctrine that courts of law will not inquire into the ade- 
quacy of consideration is based on their inability to determine what 
value the parties may have attached to a thing given or promised, 
and it does not apply to an exchange of things the value of which 
is exactly and conclusively fixed by law.^* In an Indiana case on 
this point the defendant had promised to pay^the plaintiff and oth- 
ers $600 in consideration of a promise by them to pay him one 
cent, and the consideration was held inadequate. ''It is true,'' said 
the court, ''that, as a general proposition, inadequacy of considera- 
tion will not vitiate an agreement. But this doctrine does not ap- 
ply to a mere exchange of sums of money — of coin — whose value 
is exactly fixed, but to the exchange of something of, in itself, inde- 
terminate value, for m9ney, or perhaps for some other thing of in- 
determinate value. In this case, had the one cent mentioned been 
some particular one cent, a family piece, or ancient, remarkable 
coin, . possessing an indeterminate value, extrinsic from its simple 
money value, a different view might be taken. As it is, the mere 
promise to pay $600 for one cent, even had the portion of the cent 
due from the plaintiff been tendered, is an unconscionable con- 

*• ShadweU y. Shadwell, 9 6. B. (N. S.) 159; Wright v. Wright, 54 N. X. 
437 ; Peck y. VandemsCrk, 99 N. T. 29, 1 N. E. 41 ; Dugan t. GittingB, 8 Gill 
(Md.) 138, 48 Am. Dec. 806; RockafeUow ▼. Newcomb, 57 111. 191; Frank's 
Appeal, 59 Pa. 194; Nowack r. Berger, 138 Mo. 24, 34 S. W. 489, 31 L. R. A. 
810, 54 Am. 8t Rep. 663 ; Wright ▼. Wright, 114 Iowa, 748, 87 N. W. 709, 55 
Ta R. A. 261. Release from promise to marry la sufficient Snell t. Bray, 56 
Wis. 156, 14 N. W. 14. See "ContracU,** Deo. Dig. (^ey-No.) | 54; Cent Dig. f 
tS9. 

*T Post, p. 145. 

«*6uerand t. Dandelet, 82 Bid. 561, 8 Am. Rep. 164; Pierce v. Fuller, 8 
BCasa 223, 5 Am. Dec. 102 ; McGlurg's Appeal, 58 Pa. 51 ; Hubbard v. Miller, 
27 Mich. 15, 15 Am. Rep. 153; Duffy t. Shockey, 11 Ind. 70, 71 Am. Dec. 348; 
linn y. Sigsbee, 67 HL 75; Grasselli ▼. Lowden, 11 Ohio St 349; Lawrence 
T. Kidder, 10 Barb. (N. Y.) 641. Bee "CoiUractV' Deo. Dig. (Key-No.) |S 63, 
116; Cent. Dig. H Wi, 54ft . 

AtLangd. Ck>nt 70; SCHNM.L t. NELL, 17 Ind. 29, 79 Am. Dec. 453, 
Throckmorton Ga& Contracts, 103; Shepard y. Rhodes, 7 R. I. 470, 84 Am. 
Dec 573; Brooks y. Ball, 18 Johna (N. Y.) 887. See **Contract9,'* Deo. Dig. 
{Key-No.) | 55; Cent. DiffL U tSl, tSB. 



144 CONSIDERATION (Ch. 5 

tract, void at first blush upon its face, if it be regarded as an earnest 
.one. • ^ 

In Equity 

Inadequacy of consideration will be taken into account to some 
extent by courts of equity in the exercise of their peculiar power to 
compel specific performance of contracts. It has been held that 
inadequacy of consideration, without more, is ground upon which 
specific performance may be resisted; but the better doctrine re- 
quires that there shall be such gross inadequacy as to shock the 
conscience, and amount in itself to evidence of fraud.'* And if a 
contract is sought to be avoided on the ground of fraud or undue 
influence, the consideration may be inquired into, and inadequacy 
of consideration will be regarded as corroborative evidence in sup- 
port of the suit ; ** but mere inadequacy of consideration alone is 
not enough to warrant the court's interference.** 

SUFFICIENCY OR REALITY OF CONSIDERATION 

67. Though the consideration need not be adequate to the promise,, 
it must not be illiisory or unreal; some benefit must be 
conferred on the promisor^ or some detriment suffered by 
the promisee. 

Reality of Consideration 

Although courts of law will not inquire into the adequacy of 
consideration, they will insist that it shall not be illusory or unreaL 

•0 SGHNELL t. NELL, 17 Ind. 29, 79 Am. Dec. 453, Throckmorton Gas. 
Contracts, 103. See **€ontraote,** Dec. Dig, {Key-No.) { 5S; Cent. Dig. Jl Wi, 

•1 Coles T. Trecothlck, 9 Vee. 234; Conrad y. Schwamb, 53 Wis. 378, 10 N. 
W. 895 ; €onaway ▼. Sweeney, 24 W. Va. 643 ; Randolph's Ex'r v. Quldnlck 
Co., 135 U. S. 467, 10 Sup. Ct 655, 34 L. Ed. 200 ; Watson v. Doyle. 130 111. 
415, 22 N. E. 613 ; Eaton, Eq. 539. In some states an adequate conslderatioii 
Is required by statute. MorrlU v. Everson, 77 CaL 114, 19 Pac. 190. Bee 
** Specific Performance;* Deo, Dig, {Key-No,) §{ J^9, 50; Cent, Dig, S§ 140-152, 

»t Gifford V. Thorn, 9 N. J. Eq. 702; Grlndrod v. Wolf, 38 Kan. 292, 16 Pac. 
691 ; Bowman y. Patrick (a C.) 36 Fed. 138 ; Cof er v. Moore, 87 Ala. 705, 6 
South. 306 ; Burke v. Taylor, 94* Ala. 530, 10 South. 129. See ** Contracts;* Deo. 
Dig, {Key-No,) f $4; Cent, Dig, f§ 420-430; **Evidence,** Deo. Dig, {Key-No.) 
S 419; Cent. Dig, fS 1912-1928. 

B» Phillips V. PuUen, 45 N. J. Eq. 6, 16 Atl. 9 ; Jones v. Degge, 84 Va. 685, 
5 S. E. 799; Dent v. Ferguson, 132 U. S. 50, 10 Spp. Ct 13, 33 L. Ed. 242; 
Berry v. HaU, 105 N. C. 154, 10 S. E. 903 ; Brockway v. Harrington, 82 Iowa, 
23, 47 N. W. 1013 ; Miles v. Iron Co., 125 N. T. 294, 26 N. E. 261 ; Bieme v. 
Ray, 37 W. Va. 571, 16 S. E. 804 ; Eaton, Eq. 307. And see the cases cited in 
the preceding note. See **Contracts;* Deo. Dig. {fey-No,) | $4; Cent. Dig. §f 
^0-4S0. 



S§ 68-70) MUTUAL PBOMISBS — MUTUAUTT 145 

Strictly speaking, what we call an "unreal consideration" is no con- 
sideration at all, but this use of the term cannot well mislead. To 
understand what the law regards as a real and what as an unreal 
consideration, it will be well to inquire into the various forms which 
consideration may assume, and to note the grounds upon which 
certain alleged considerations have been held to be of no real value 
in the eye of the law. 

Forms of Consideration 

The consideration for a promise may be an act or a forbearance, 
or a promise to do or forbear. When a promise is given for a 
promise, the contract is said to be made upon an executory consid- 
eration. The obligations created by it rest equally upon both par- 
ties, each being bound to a future act. An example is in case of 
mutual promises to marry, in which the consideration for the prom- 
ise of each is the promise of the other. When the consideration for 
a promise is an act or forbearance, the contract is said to be made 
upon a consideration executed. This arises when either the offer 
or acceptance is signified by one of the parties doing all that he is 
bound to do under the contract so created."* 

A contract consis tin p^ of mutual prom ises^ s<;^ th^t hotl^ p ^ ft k^ 
a re bound to some future a gt qi; for ^<*aranr^^ f<^ c^^jf^ j^riji^ bilateral. 
A contractin which the offer or a cceptance ift ^^ig^ug ed by one^ f 
the parties doing all \\^ jc r#>qiii|-pH tn Hn under tjie agreement, leav- 
ing outstandmg obl igations on the other ]2.?£l3L on^Zi. is sal3~to*&e 

lihil^t^ral. "^ 



SAME— MUTUAL PROMISES— MUTUALITY 

68. A promise is a sufficient co nsideration fo r a promise . 

69. The promises must be concurrent. 

70. The promise may be contingent or conditional, except that-^ 
MUTUALITY — Mutuality of engagement is necessary, and, if 

the condition or contingency produces want of mutuality, 
the consideration is insufficient Both part ies must be 
bound or neither is bound . 

^ « 

It is Veil settled that a promise is a sufficient consideration for a 
promise.'* And this is true although the performance of the act 

■4 Thomas v. South Haven & B. R. Ck)., 138 Mich. 50, 100 N. W. 1009. Bee 
^Contraot9,** Dee. Dig. {Kev-No,) | 78; Cent Dig. $S 354-^56. 

iB Hlggins ▼. Hfl], 56 Law T. R. (N. 8.) 426; Strangborough and Warner's 
Case, 4 Leon, 8 ; Gower t. Capper, Cro. Ellz. 543 ; Nichols ▼. Raynbred, ITob. 

Clamk OoifT.(8o Ed.)— 10 



146 CONSIDBRATION (Ch. 5 

promised will result in greater benefit to the promisor than to the 
promisee.'* In the case of mutual promises to marry, the promise 
of each party is a sufficient consideration for the promise of the 
other ; '^ and so it is in any other case of mutual promises, provid- 
ed, of course, the promises are to do something of value in the eye 
of the law. In odier words, as a rule, a promise to do a thing is 
just as valuable a consideration as the actual doing of it would be. 
After a person had sold and conveyed land, the parties, differing as 
to the quantity of land embraced in the tract, made an agreement 
by which the land was to be surveyed, and the grantor should pay 
for any deficiency, while the grantee should pay for any excess over 
the acreage mentioned in the deed. It turned out that there was 
an excess, but the grantee, when sued on his promise to pay there- 
for, claimed that, as all the land was conveyed by the deed, his 
promise was without consideration. It was held, however, that 
the promise of the grantor to pay for any deficiency was a sufficient 
consideration.** 

The promises, to constitute a consideration for each other, must 
be concurrent, or become obligatory at the same time ; otherwise 
each will be without consideration at the time it is made, and both 
will therefore be nuda pacta.** As explained in treating of offer 
and acceptance, some time must necessarily elapse between an offer 
and its acceptance, and in some cases a considerable time may 
elapse. The offer, however,*is considered as continuing during the 
time allowed for acceptance; and when it is accepted by the giv- 
ing of a promise both promises become obligatory at the same time, 
or are concurrent 



88; Misslsquol Bank ▼. Sabln, 48 Vt 239; Buckingham y. Ludlnm, 40 N. J. 
Eq. 422. 2 Aa 265 ; PhiUips v. Preston, 5 How. 278, 12 L. Ed. 162 ; Funk v. 
Hough, 29 IlL 145; Coleman v. Eyre, 46 N. Y. 38; Brlggs v. TlUotson, 8 Johns. 
(N. Y.) 804 ; Baker v. Railroad Co., 91 Mo. 152, 8 S. W. 486 ; Porter v. Rose, 
12 Johns. (N. Y.) 209, 7 Am. Dec. 806 ; Cramer v. Redman, 10 Wyo. 828y 68 Pac. 
1008. Promise to attend a person's funeral in return for promise by the lat- 
ter to pay money. Earle y. Angell, 157 Mass. 294, 32 N. E. 164. See **Con' 
tracu;* Dec. Dig. (Key-No.) S S6; Cent. Dig. §§ SU-^SS. 

«• Dendy v. Russell, 74 Pac. 248, 67 Kan. 721. Bee "OontractB," Deo. Dig. 
{Key-No.) % 67; Cent. Dig. §§ SU, S45. 

BT Harrison v. Cage, 6 Mod. 411 ; Holt v. Ward Clemencleux, 2 Strange, 937. 
See **Breach of Marriage Promise," Dec. Dig. {Key-No.) § 5; Cent. Dig. § 2. 

»• Seward v. Mitchell, 1 Cold. (Tenn.) 87 ; Howe v. O'Mally, 5 N. C. 287, 
8 Am. Dec 693. It would be otherwise If there were no promise by the gran- 
tor. Smith V. Ware, 13 Johns. (N. Y.) 259. See '^Contracts,*' Dec. Dig. (Key- 
No.) U 56-58; Cent. Dig. §§ SUS5S. 

B* Nichols y. Raynbred, Hob. 88; Keep y. Goodrich, 12 Johns. (N. Y.) 897: 
Tucker y. Woods, 12 Johns. (N. Y.) 190, 7 Am. Dec. 305 ; Buckingham y. Lud- 



§§ 68-70) MUTUAL PBOMISES — MUTUALITT 147 

A promise which is merely voidable/ as in, case of an infant, may 
be a sufficient consideration.** And, as we have seen, an oral 
promise which is unenforceable within the statute of frauds is gen- 
erally held to be a good consideration for the promise of the other 
if he has signed the writing.** 

Voluntary Subscriptions 

Voluntary subscriptions by a number of persons to promote some 
object in which the3N have a common interest — as, for instance, 
where a number of persons . voluntarily promise to pay a certain 
sum each to found a college — ^have been said to furnish an illustra- 
tion of mutual promises. Some courts have sustained them on the 
ground that the promise of each subscriber is the consideration for 
the promises of the others.*' This ground, however, appears to be 
untenable, for the reason that as a matter of fact the subscribers, 
in most cases Sit least, do not give their promises in consideration 
of each other.** An additional objection to a recovery by the bene- 
ficiary in such cases is that the beneficiary, not being a party to 
the contract, cannot maintain an action upon it,** except in slates 
which have established the broad rule that a person for whose ben- 
efit a promise is made can sue upon it.** The liability of the sub- 
scriber upon his subscription in such cases is generally enforced, 
but different courts advance different views in support of their 
holdings.** By some courts it is held that the subscription is an 
offer which becomes binding by acceptance when the beneficiary 

lum, 40 N. J. Eq. 422, 2 Atl. 266. See *'Contracts;* Deo. Dig. (Key-tfo.) |{ 55- 
58; Cent Dig. S§ SU-S5S. 

•• Holt V. Ward Clemendeux, 2 Strange, 937; post, p. 18QL See ^'Contracts;* 
Dee. Dig. (Key-No.) tS 56-68; Cent Dig. §5 SU-S5S. 

•1 Ante, pp. 110, lai. 

•« Hlgert V. Asbury University, 63 Ind. 326 (coUectlng cases) ; Lathrop v. 
Knapp, 27 Wis. 214 ; Trustees of Troy Ck>nference Academy ▼. Nelson, 24 Vt 
189 ; Christian Ck)llege ▼. Hendley, 49 Cal. 847 ; Allen ▼. Duffle, 43 Mich. 1, 4 
N. W. 427, 38 Am. Rep. 159 ; First Unlversallst Church v. Pungs, 126 Mich. 
070, 86 N. W. 235; Irwin v. Lombard University, 66 Ohio St 9, 46 N. E. 63, 
36 Lu R. A. 239, 60 J^m. St Rep. 727 ; Waters v. Union Trust Co., 129 Mich. 
640, 89 N. W. 687. See **8uh8cription8,** Deo. Dig. (Key-No.) § 15; Cent. Dig. 
S§ 14-17. 

••Cottage Street Church v. Kendall, 121 Mass. 528, 23 Am. Rep. 286; Cul- 
ver y. Banning, 19 Minn. 303 (Gil. 260) ; Presbyterian Church of Albany v. 
Cooper, 112 N. Y. 517, 20 N. E. 352, 3 L. R. A. 468, 8 Am. St Rep. 767. See 
**8ub8oHption9," Dec. Dig. (Key-No.) § 15; Cent. Dig. §{ U-17. 

•4 Presbyterian Church of Albany v. Cooper, supra. Cf. Keuka College v. 
Ray, 1H7 X Y. 96, 60 N. E. 326^ See post, p. 442. See "^Subscriptions," Dee. 
Dig. (Key-No.) § 15; Cent. Dig. Sl 14-17. 

•ft Irwin y. Lombard University, supra. •• See 15 Harv. L. R. 312L 



148 CONSIDERATION (Ch. 5 

in reliance upon it incurs expense or liability.*^ Other courts sus- 
tain the liability of the subscriber on the ground of equitable es- 
toppel arising from the expenditure of money or incurring of liabil- 
ity by the beneficiary in reliance upon the subscription.'* By still 
other courts it is held that when the subscription is accepted there 
is an implied counter promise on the part of the beneficiary, which 
is the consideration.** In accordance with this latter view, it is said 
in a recent Pennsylvania case: '• "The general trend of judicial de- 
cision may therefore be said to be in the direction of sustaining 
contracts for subscriptions or donations to churches or charitable 
or kindred institutions, where the same have been duly accepted ; 
their acceptance constituting a good consideration, for the reason 
that obligations are thereby assumed." 

Contingent and Conditional Promises — Options 

In bilateral contracts-^that is, where the consideration for a 
promise is a promise — ^the whole contract may be intended by the 
parties to be contingent, so that obligation is to arise under it only 
upoQ the occurrence of some event or contingency. If A. offers 
to supply at a certain price such goods as B. may order, and B. 
promises to pay at that price for such goods as he may order, there 
is, of course, no contract, for B. has not promised to order any 
goods, and it is optional with him whether his promise to pay shall 
ever come into effect.^* Both parties must be bound or neither 

«T Sherwln y. Fletcher, 168 Mass. 413, 47 N. E. 197 ; Grand Lodge I. O. O. 
T. y. Farnham, 70 GaL 158, 11 Pac. 692. See, also, Twenty-Third St Baptist 
Church y. Cornell, 117 N. Y. COl, 23 N. E. 117, 6 L. R. A. 807; Town of Grand 
Isle y. Kinney, 70 Vt 861, 41 Aa 130; Richeliefa Hotel Co. y. International 
MUitary Encampment Co., 140 tU. 248, 29 N.- B. 1044, 83 Am. St Rep. 234 ; 
Hodges y. Nalty, 104 Wis. 464, 80 N. W. 720. Bee "*9u6«crip<iofW/' Dec. Dio- 
{Key-No,) ( 15; Cent. Dig. U 14-17. 

«• BEATTY'S ESTATE y. WESTERN COLLEGE OF TOLEDO, IOWA, 177 
IlL 280, 52 N. E. 432, 42 L. R. A. 797, 69 Am. St Rep. 242, Throckmorton Cas. 
Contracts, 106. See, also, Irwin y. Lombard University, 56 Ohio St 9, 46 N. 
E. 63, 36 L. R. A. 239, 60 Am. St Rep. 727; Simpson Centenary College y. 
TutUe, 71 Iowa, 596, 33 N. W. 74. See "Subscriptions,*' Dec. Dig. iKey-No.) S 
15; Cent. Dig. §§ 14-17. 

«• Trustees of Maine Cent Inst y. Haskell, 73 Me. 140; Barnett y. Franklin 
College, 10 Ind- App. 103, 37 N. E. 427. And see Keuka College y. Ray, 167 
N. Y. 96, 60 N. B. 325. See "BuhscriptUms," Dec. Dig. (Key-No.) { 5; Cent. 
Dig. §5 «. 7. 

TO Presbyterian Board of Foreign Missions y. Smith, 209 Pa. 361, 58 Atl. 
689, per Thompson, J. See "Suhscriptions,** Deo. Dig. (Key-No.) 5 5; Cent 
Dig. §§ «, 7. 

Ti American Cotton Oil Co. y. Kirk, 68 Fed.. 791, 15 C. C. A. 540; Rafoloyita 
y. Tobacco Co.. 73 Hnn, 87, 25 N. Y. Supp. 1036; Chicago & G. E. Ry. Co. v. 
Dane, 43 N. Y. 240; Davie y. Mining Co., 93 Mich. 491. 53 N. W. 625, 24 L. 
R. A. 357 ; Teipel y. Meyer. 106 Wis. 41, 81 N. W. 982 ; Dennis y. Slyfleld, 117 



5S 68-70) MUTUAL PBOMISE9 — ^MUTUALITT 149 

IS bound; in other words, there must be mutuality of engage- 
ment." In such a case, indeed, if before the offer is withdrawn, B 
orders goods, A. is bound to sell at the price named.^* 

, On the other hand, if A. offers to supply at a certain price all the 
goods of a certain kind which B. may need in his business for a 
certain time, and B. promises to buy such goods, the promises are 
mutually binding;^* for although B. may not need the goods, and 
hence is not absolutely bound to pay, in the event of the contingen- 
cy of his needing the goods hd is bound to buy them of A. So, if 
the agreement is for the purchase by B. of all or a certain part of 

Fed. 474, 54 G. a A. 52a See "Contracts," Dee. Dig. (Key-No.) §i 58, 59; Cent. 
Dig. SS S46-S48; "Sales^ Dec. Dig. (Key-No.) §§ 24, 25; Cent. Dig. §§ 49--^2; 
** Vendor and Purchaser," Dec. Dig. (Key-No.) S 18; Cent. Dig. ( 2S. 

T« Keep ▼. Goodrich, 12 Johns. (N. Y.) 307; Ewlns v. Gordon, 49 N. H. 444; 
Burnet v. Bisco, 4 Johns. (N. Y.) 285; McKinley y. Watkins, 13 lU. 140; 
L'Amorenx y. Gonld, 7 N. Y. 849, 57 Am. Dec 524 ; Thayer y. Burchard, 99 
MassL 608; Smith y. Weaver, 90 lU. 892; Bean y. Burhank, 16 Me. 458, 33 
Am. Dec 681; Men y. Insurance Go., 66 Mo. 127; Stembridge y. Stembridge's 
Adm'r, 87 Ky. 91, 7 S. W. 611; Shenandoah VaL R. Go. y. Donlop, 86 Va. 
340, 10 S. E. 239; Barker y. Gritzer, 35 Kan. 459, 11 Pac. 382; Warren y. Gos- 
tello, 109 Mo. 338, 19 S. W. 29, 32 Am. St Rep. 669 ; GreybiU y. Bmgh, 89 
Va. 895, 17 S. E. 558, 21 L. R. A. 133, 37 Am. St Rep. 894 ; Wagner y. J. & 

O. Meakin. 92 Fed. 76, 33 G. G. A. .'>77 : Morrow y. Express Go.. 101 Ga. 810, 
28 S. E. 998. 8ee, also, cases cited, p. 146, note 69. See "Sales," Dec. Dig. 
(Key-No.) t§ 24, 25; Cent. Dig. (( 49^2. 

T»G. N. Railway Go. v. Witham, L R. 9 G. P. 16; Johnston y. Trippe (G. 
€.) 33 Fed. 530; Moses y. McGlain, 82 Ala. 870, 2 South. 741; Wisconsin, I. 
A N. Ry. Go. y. Braham, 71 Iowa, 484, 32 N. W. 392 ; Dayls y. Robert 89 Ala. 
402, 8 South. 114, 18 Am. St Rep. 126 ; Ross y. Parks, 98 Ala. 153, 8 South. 
868, 11 L. R. A 148, 80 Am. St Rep, 47 ; Thayer y. Burchard, 99 Mass. 508 ; 
Cooper y. Wheel Go., 94 Mich. 272, 54 N. W. 39, 34 Am. St Rep. 341. See, 
also, Michigan Bolt ft Nut Works y. Steel, 111 Mich. 153, 69 N. W. 241. Filing 
of bill by yendee for specific performance has been held to supply mutual- 
ity. Dynan y. McGuUo^di, 46 N. J. Eq. 11, 18 AtL 822. But most of the cases 
are to the contrary. See cases cited ante, note 72. See "Sales," Dec. Dig. 
{Key-No.) H 24, 25; Cent. Dig. (( 49-^2. 

T4 See Sheffield Furnace Co. y. Goke Go., 101 Ala. 446, 14 South. 672; Wells 
▼. Alexandre, 130 N. Y. 642, 29 N. B. 142, 15 U R. A. 218 ; Smith y. Morse, 
20 La. Ann. 220; Minnesota Lumber Go. y. Goal Go., 100 III 85. 43 N. B. 774, 
81 Lu R. A 529 ; Hickey y. O'Brien, 123 Mich. 611, 82 N. W. 241, 49 L. R. A. 
«94, 81 Am. St R^p. 227 ; E. G. Dalley Go. y. Gan Go.. 128 Mich. 591. 87 N. 
W. 761; Manhattan OU Co. y. Lubricating Co., 113 Fed. 923, 51 G. C. A. 553; 
Excelsior Wrapper Go. y. Messlnger. 116 Wis. 549, 93 N. W. 459 ; LoudenbacK 
Fertilizer Go. y. Phosphate Ca. 121 Fed. 298, 58 C. G. A. 220, 61 L. R. A. 402. 
Contra, Bailey y. Austrian, 19 Minn. 535 (Ga 465). An agreement by a whole- 
sale dnUer to supply a retailer, which leaves it practically optional to increase 
4Mr diminish his orders with the rise or fall of prices, held yoid for want of 
mutuality. Crane y. a Crane ft Co., 105 Fed. 869, 45 G. G. A 9a See. also. 
<5oW Blast Transp. Go. y. Bolt & Nut Co., 114 Fed. 77, 52 a C. A 25, 57 L. R. 
JL 696. See "Sales," Dec Dig. (Key-No.) U 24t ^S; Cent. Dig. H 49-5p. 



150 CONSIDERATION (Ch. 6 

all the goods of a certain kind that A. may produce in a certain 
period/* 

Somewhat similar in* character are the considerations which con- 
sist in conditional promises;'* as, for instance, where a person 
promises to do something for a reward, but the other .party only 
binds himself to pay the reward upon the happening of an event 
which may not be under the control of either party. Such would be 
the case in a building contract where the promise to pay for the 
work to be done is made conditional upon the approval of the ar- 
, chitect. Again, the promise may be conditional on something hap- 
pening, as in case of promises in a charter party which are not to 
take effect if certain specified risks occur. In the one case the 
promise depends for its fulfillment upon a condition precedent; in 
the other it is liable to be defeated by a condition subsequent. In 
neither case does its conditional character prevent it from forming 
a sufficient consideration for promises given in return. These cases 
are for consideration in a subsequent chapter.'^ 



SAME— FORBEARANCE TO EXERCISE A RIGHT 

71. Forbearance or a promise to forbear from doing what one is 

otherwise entitled to do is a sufficient consideration. 

72. Forbearance or a promise to forbear from doing what one can- 

not legally do is no consideration ; but if a right is doubt- 
ful, so that there are reasonable grounds for trying to en- 
force it, forbearance is a sufficient consideration. 

73. COMPROMISE. "Where the forbearance is in the compromise 

of a disputed claim made or action brought in good faith 
\« (and on reasonable grounds)/' forbearance to insist or sue 




T5McCall Co. y. Icks, 107 Wis. 232, 83 N. W. 300. See, also, Burgess Sul- 
phite Fibre Co. v. Broomfleld, 180 Mass. 283, 62 N. E. 3(37; Brawley y. U. 
S., 96 U. S. 168, 24 L. Ed. 622 ; Lobenstein v. U. S., 91 U. S. 324, 23 L. Ed. 
410 ; Grant v. U. S., 7 Wall 331, 19 L. Ed. 194. Where land was agreed to 
be sold, and the title was defective, by reason of a suit .to set aside a will 
under which the vendor claimed, an agreement to postpone execution of the 
contract untU determination of the suit was sustained on the ground that the 
'vendee would be bound to accept the title if the wUl should be sustained. 
Hale V. Cravener, 128 111. 408, 21 N. E. 534. See ante, p. 149, note 74. fifee 
''Bales;* Dec, Dig. (Key-No,) S§ «^. 25; Cent Dig, SS kO-52, 

Te Ensign v. Park, 69 Kan. 870, 77 Pac. 583. See "Contracts,^ Dee, Dig 
{Key-No,) §S 58, 59; Cent, Dig, §§ S^SS^S, 

TT Chapter 11, pp. 676-678. 

Ts As to the qualification introduced by the words in parentheses, see post, 
p. 155. 



SS 71-73) FOBBEARAKCB TO BXEBCISB A RIGHT 151 

on the claim, or further to prosecute the action, is a suffi- 
cient consideration without regard to the validity of, the 
claim* 

Consideration may consist in a forbearance or promise to for- 
bear from doing what one is otherwise entitled to do; as, for in- 
stance, where a person abstains from the use of liquor and tobacco, 
on another's promise to pay him money/* The abandonment of 
any right, or a promise to forbear from exercising it, is a sufficient 
consideration for a promise/* The right may be legal or equitable, 
certain or doubtful; and it may exist against the promisor or 
against A third party/^ A creditor, if he extends the time for pay- 
ment of the debt, gives up a right, and so furnishes a consideration 
for an additional promise by the debtor,** or fof the promise of a 
third party to guaranty or pay the debt.** So, also, the discharge 
of a debtor from the debt,** or from lawful imprisonment for the 

»» Ante. pp. 133, 134. 

•• Blake ▼. Peck, 11 Vt 483; Leverenz ▼. Haloes, 32 111. 357; Woodbnm v. 
Woodbnm, 123 lU. 608» 14 N. E. 68, 16 N. E. 200; Calkins ▼. Chandler, 36 
Mich. 320, 24 Am. Rep. 583 ; Marshalltown Stone Co. v. Manufacturing Co., 
114 Iowa, 674, 87 N. W. 496; Waters v. White, 76 Conn. 88, 52 Atl. 401/ 
Agreement between attachment creditors of a debtor. Mygatt y. Tarbell, 78 
Wis. 851, 47 N. W. 618; Doan ▼. Dow, 6 Ind. App. 324, 35 N. E. 700; Brown- 
ell Y. Harsh, 29 Ohio St 631. Forbearance to contest wlU. Rector, eta, of 
St Mark's Church, v. Teed, 120 N. Y. 583, 24 N. E. 1014. The release by a 
person of a claim, in good faith, of a future contingent interest in certain land 
under the wUl of a deceased ancestor, is a sufficient consideration for a note 
given therefor, whether he In fact had any interest in the land or not Brooks , 
▼. Wage, 85 Wis. 12, 54 N. W. 997. Release of mortgage. Norrls y. Vosburgh, 
96 Mich. 426, 57 N. W. 264. Bee '^Contractt,'' Deo. Dig. (Key-No.) I 71; Cent, 
Dig, S§ tBSStJ^. 

•1 Release by wife of Inchoate right of dower wUl support a promise by her 
husband's grantee to pay her money. Worley y. Slpe, 111 Ind. 238^ 12 N. B. 
885. Release of inchoate right of homestead in public lands wiU support a 
promise. McCabe y. Caner, 68 Mich. 182, 35 N. W. 901. And see Paxton Cat- 
tle Co. ▼. Bank, 21 Neb. 621, 33 N. W. 271, 59 AoL Rep. 852. Bee "Contracts,** 
Dee. Dig. (Key-yo.) i 71; Cent. Dig, U t95^24, 

•s Lipemeier y. Vehslage (C. C.) 29 Fe6^ 175; Martin y. Nixon, 92 Mo. 26, 4 
8. W. 503; Van Gorder y. Bank (Pa.) 7 Atl. 144; Brown y. Bank, }15 Ind. 
572, 18 N. B. 56; Lundberg y. Elevator Co., 42 Minn. 87, 43 N. W. 685; San- 
ders y. Smith (Miss.) 5 South. 514 ; Fraser y. Backus, 62 Mich. 540, 29 N. W. 
d2; Lodge y. Hullngs, 63 N. J. Eq. 159, 51 Atl. 1015. See ^'Contracts^" Dec 
Dig. (Key-No.) f 71; Cent. Dig. fiS 295-^24. 

•t Calkins y. Chandler, 36 Mich. 320, 24 Am. Rep. 593 ; Bank of New Han- 
eyer y. Bridgers, 98 N. a 67, 8 S. E. 826, 2 Am. St Rep. 317; ^layers y. 
Hockenbury, 84 N. J. Law, 346. Bee ^'Contracts,*' Deo. Dig. (Key-No.) { 71; 
Cent, Dig. » t95-S24. 

»4 Whitney y. Clary, 145 Mass. 156, 13 N. B. 893; Fulton y. LougbUn, 11^ 



152 CONSdDERATION (Cfa. 5 

debt,*' is a consideration for the promise of a third person to pay 
the debt ; and the surrender or cancellation of a note or mortgage 
is a consideration for a new note or mortgage/* ^ 

It has been held that agreement to forbear is necessary, and that 
mere forbearance to sue, for instance,' without any agreement to- 
that effect, is not a sufficient consideration for the promise of an- 
other to pay the debt of the person liable, though the act of for- 
bearance may have been induced by the promise ; '^ but upon prin- 
ciple it seems that actual forbearance upon request and in reliance 
upon the promise is sufficient.** 

Time of Forbearance 

Questions have been raised as to the length of time over which a 
forbearance to sue must extend in order to constitute a considera- 
tion. It has even been held that a promise of forbearance for an un- 
specified time wasinsufficient,** but it is now settled that a promise 
of forbearance need not be a promise of absolute forbearance, nor 
even of forbearance for a definite time. Where no time is mention- 
ed, a reasonable time will be implied, or, at any rate, where there 
is a promise to forbear, and actual forbearance for a reasonable 
^time, it is enough.** 

Ind. 266, 20 N. B. 796. Bee "Contracts;^ Dee. Dig, (Key-No.) { 71; Cent. Dig. 
H 295-924. 

*• Smith V. Monteitb, }3 Mees. & W. 427. See ^'Contracts** Deo. Dig. {Key-^ 
No.) 1 11; Cent. Dig. §§ 295-32^. 

•« Constant v. University, 111 N. Y. 604, 19 N. B. 631, 2 L. R. A. 734, 7 Am. 
St Rep. 769 ; Erie Co. Sav. Bank v. Coit, 104 N. Y. 532, 11 N. B. 64. flfee 
' **Contractsr Dec Dig, (Key-Nb.) S 71; Cent. Dig. H 295'S2i. 

•T Manter ▼. Churchill, 127 Mass. 31. And see Mecorney v. Stanley, 8 Cnsh. 
(Mass.) 85 ; Shadbume v. Daly, 76 Cal. 355, 18 Pac. 403. See "Contractd,** Dec. 
Dig. (Key-No.) S 75; Cent. Dig. Sfi S26, 921. 

•a Crears v. Hunter, 10 Q. B. Div. 341. And see Strong t. Sheffield, 144 N. 
Y. 392. 30 N. E. 330 ; Waters ▼. White, 75 Conn. 88, 52 Atl. 401 ; Standardr 
Supply Co. Y. Person, 70 S. E. 745, 154 N. 0. 456 (where this doctrine is said to- 
be supported by the weight of authority). See ** Contracts,'' Dec. Dig. (Key- 
No.) § IS; Cent. Dig. §§ 326, 321. 

»» Semple v. Pink, 1 Exch. 74. See Payne v. Wilson, 7 Barn. & 0. 42a Bee 
"Contracts,'* Dec Dig. (Key-No.) I 11; Cent. Dig. §§ 295-32^. 

•0 Oldershaw y. King, 2 Hurl, ft N. 399, 517 ; Alliance Bank ▼. Broom, 2^ 
Drew. A S. 280; Howe v. Taggart, 133 Mass. 284; Elting ▼. VanderlyOk 4 
Johns. (N. T.) 237; Bowen v. Tipton. 64 Md. 275, 1 Atl. .861; Calkins ▼. 
Chandler, 36 Mich. 820, 24 Am. Rep. 593 ; Moore v. McKenney, 83 Me. 80, 21 
Atl. 749, 23 Am. St Rep. 753 ; Foard ▼. Grinter's Ex'rs (Ky.) 18 S. W. 1034 ; 
Traders' Nat Bank v. Parker. 130 N. Y. 415, 29 N. E. 1094 ; Citizens' Sav. 
Bank ft Trust Co. v. Babbitts' Estate, 71 Vt 182, 44 Atl. 71; McMlck«i v. 
Safford, 197 lU. 540, 64 N. E. 540. But see Gamett v. Kirkman, 33 Miss. 389; 
Clark V. Russel, 8 Watts (Pa.) 213, 27 Am. Dec. 34a See ^'ContraotSt'* Dec^ 
Die. (Key-No.) |§ 212, 213; Cent. Dig. SS 950, 962. 



•S§ 71-73) FOBBEABANGB TO BXEBGI8E A BIGHT 163 

Forbearance to Do.Wtutt One Cannot Legally Do 

It is no consideration for a promise for a man to forbear or to 
promise to forbear from doing what he is not legally entitled to 
do.^^ This proposition would seem to be obvious, but questions 
have arisen in its application, and have given rise to some conflict 
in the decisions. 

Some applications of the {)rinciple are clear. A forbearance or 
promise to forbear, for instance, from claims under an illegal con- 
tract, such as a gambling contract, or a contract involving the com- 
mission of crime, can form no consideration for the promise of the 
other party, since the contract is void, and could not be enforced.*' 
So, also, the release of a debtor from imprisonment was held to be. 
no consideration for a promise where, by the previous release of a 
codebtor, the debt had been discharged, since the imprisonment was 
therefore unlawful.** So a promise to pay rent, made solely to 
prevent an unlawful eviction, is without consideration.** 

As a general rule, it is safe to say that, in order that forbearance 
to exercise a right may constitute a consideration, the right must 
be at least doubtful. Forbearance to insist upon a claim that is 
clearly unenforceable, at least if it be known to the claimant to be 
such, cannot be a consideration. 

Compromise 

A common form in which a forbearance appears as the consider- 
ation for a promise is in the settlement or compromise of a disputed 

»i In Barnard ▼. Simons (1616) 1 RoUe, Abr. 26, Langd. Cas. Cont 194, It 
was said that "if A. makes a void assumpsit to B., and afterwards a stran- 
KCT comes to B., and, in consideration that B. will relinquish the assumpsit 
made to him by A., he promises to pay him £10, this i& not a good considera- 
tion to charge him, because the first assumpsit was void." See Palfrey v. 
Railroad Ck>., 4 AUen (Mass.) 55; Shuder t. Newb3% 85 Tenn. 348, 3 S. W. 438; 
dark V. Jones, 85 Ala. 127, 4 South. 771 ; Sharpe ▼. Rogers, 12 Minn. 174 (Gil. 
103); Harris ▼. Cassady, 107 Ind. 158, 8 N. E. 29; Ecker v. McAllister, 54 
Ifd. 369; Schroeder v. Fink, 60 Md. 438; Long v. Towl, 42 Mo. 545, 97 Am. 
Dec. 355; Martin v. Black, 20 Ala. 309; Prater v. Miller, 25 Ala. 320, GO Am. 
Dec. 621 ; Davisson v. Ford. 23 W. Va. 617 ; Ebllii v. Miller's Elr'rs, 78 Ky. 371. 
Many of these cases, however, In conflict with what is the prevailing rule, 
maintain that forbearance to sue on an invalid claim, though honestly be- 
lieved in, is no consideration. Post, p. 155. See **ContractM,** Dec. Dig. {Key- 
^o.) S 7£; Cent. Dig, | Sto. 

•2 Everlngham ▼. Meighan, 55 Wis. 354, 13 N. W. 269. Bee "Contracts,** Dec. 
Dig, {Key-Vo,) ( It; Cent. Dig. i S25. 

*• Herring y. Doiell, 8 DowL Pr. Cas. 601 Bee "Contraeta,*' Deo, Dig, {Key- 
No.) I 7t; Cent. Dig. | S25. 

•« Smith y. Ooker, 110 Ga. 654, 36 S. B. 107 ; Tolhurst v. Powers, 133 N. T. 
460, 31 N. E. 326 (surrender of what promisee has no right to retain). Bee 
''ContracU,'* Dee, Dig, {Key-Vo.) itft; Cent, Dig, S 525. 



154 CONSIDERATION (Ch. 5 

claim. Forbearance by a person to insist upon a demand, or to 
prosecute an action which he has commenced, is, subject to excep- 
tions to be presently explained, a sufficient consideration.*' Illus- 
trations are furnished by cases in which one party makes a claim 
or demand on another, and the latter disputes it, whereupon they 
settle the dispute by a compromise, or by agreeing upon the amount 
due in an account stated. Likewise a compromise will. support a 
promise by a third party.** 

The authorities are all agreed that the promisee must believe in 
his claim, or in his action; and that forbearance to sue on a de- 
mand known by him to be unenforceable, or to proceed in an action 
knowingly brought without cause, is no consideration.*^ It is also 
well settled that the mere fact that the claim was invalid or un- 
enforceable does not prevent its surrender from constituting a good 
consideration if the claim was a doubtful one in regard to the va- 
lidity of which there was reasonable ground for difference of opin- 
ion.** When we reach this point, the difficulty begins.** . 

•5 SMITH T. FARRA, 21 Op. 895, 28 Pac. 241, 20 L. R. A. 115, Throckmor- 
ton Cas. Contracts, 100 ; McKinley t. Watklns, 13 111. 140 ; Cook v. Wrigbt, 1 
Best & S. 559; Callisher y. Blschoffshelm, L. R. 6 Q. B. 449; McClellan v. 
Kennedy, 8 Md. 247 ; Longridge t. Donrllle, 5 Bam. ft A. 117 ; Jones y. Rit- 
tenhonse, 87 Ind. 848 ; Fisher y. May's Heirs, 2 Bibb (Ky.) 448, 5 Am. Dea 
626 ; Hennessy y. Bacon, 137 IT. S. 85, 11 Sup. Gt» 17, 84 U Ed. 605 ; Slsson 
y. City of Baltimore, 51 Md. 83; Growther y. Farrer, 15 Q. B. 677; Nash y. 
Armstrong, 10 C. B. (N. S.) 259 ; Heffelflnger y. Hnmmel, 90 Iowa, 811, 67 N. 
W. 872; McGlure y. McClnre, 100 Cal. 839, 34 Pac 822. The suit need not 
be actually discontinued before suit on the promise. The agreement ends it 
Phillips y. Pullen, 50 N. J. Law, 439, 14 Att. 222; Van Gampen y. Ford, 53 
Hun, 636, 6 N. Y. Supp. 139; Rappanier y. Bannon (Md.) 8 AtL 555. See 
'^Compromise and Settlement,*' Deo. Dig. {Key-No.) S 6; Cent. Dig. {( S&^O; 
**Contract9r Cent. Dig. | S29. 

•• Bane's Gase (1611) 9 Goke, 93b. Withdrawal of a suit against a person, 
for instance, will support his father's note. Mascolo y. Montesanto, 61 Gonn. 
50, 23 Atl. 714, 29 Am. St Rep. 170. See ^'Compromise and Settlement,*' Deo. 
Dig. (Key-No.) ^ 6; Cent. Dig. S( S5-50; ''Contractsr Cent. Dig. § S29. 

»T Wade y. Simeon, 2 G. B. 548; McKinley y. Watklns, 13 111. 140; Rood y. 
Jones, 1 Doug. (Mich.) 188; McGlynn y. Scott, 4 N. D. 18, 58 N. W. 460; 
Phillips y. Pullen, 50 N. J. Law, 439, 14 AtL 222; Von Brandenstein y. Ebens- 
berger, 71 Tex. 267, 9 S. W. 153 ; Demars y. Manufacturing Go., 37 Minn. 418, 
35 N. W. 1 ; Taylor y. Weeks, 129 Mich. 233, 88 N. W. 466. See **Compromise 
and Settlement;* Dec. Dig. (Key-No.) ( 6; Cent. Dig. §| SS^O; '^Contracts,** 
Deo. Dig. (Key-No.) % 68; Cent. Dig. U S28-SS0. 

»» SMITH y. FARRA, 21 Or. 395, 28 Pac 241, 20 L. R A. 115. Throckmor- 
ton Gas. Gontracts, 109 ; Grandin y. Grandin, 49 N. J. Law, 508, 9 AtL 756, 
60 Am. Rep. 642; Dunham y. Grlswold, 100 N. Y. 224, 8. N. B. 76; Kome y. 
Kome, 80 W. Va. 1, 8 S. E. 17 ; Nelbles y. Railway Go., 87 Minn. 151, 33 N. 
W. 332; Honeyman v. Jarvls, 79 111. 318; Potts y. Polk Go., 80 Iowa, 401, 45 



•• See cases cited infra, notes 1-0. 



§§ 71-73) FOBBEARANOE TO EXEBCISE A RIGHT 155 

In some jurisdictions, the compromise is said to be void for want 
of consideration unless there was actual doubt as to the validity of 
the promisee's claim.^ According to these authorities, belief by 
the promisee in the existence of a good claim is not sufficient, if 
in fact there was no reasonable ground for his belief. 

In England,* however, and by the weight of authority in this 
country,* the compromise is upon sufficient consideration if the 
promisee surrenders a claim made by him in good faith, even though 
the claim was unenforceable and there was no reasonable ground 
for his belief in its validity. In a leading English case it was said : 
''If he bona fide believes he has a fair chance of success, he has a 
reasonable ground for suing, and his forbearance to do so will con- 
stitute a good consideration. When such a person forbears to sue, 
he gives up what he believes to be a right of action, and the other 
party gets an advantage, and, instead of being annoyed with an 
action, he escapes from the vexations incident to it. ♦ ♦ ♦ It 
would be another matter if a person made a claim which he knew 
to be unfounded, and by a compromise derived an advantage under 
it ; in that case his conduct would be fraudulent.'' ^ And in a later 

N. W. 775 ; Prout v. Plttsfleld Fire Dlst, 154 Mass. 450, 28 N. B. 679 ; Dovale 
▼. Ackermann, 2 App. Dlv. 404, 37 N. Y. Supp. 059. See **Compromise and 8et- 
ilemewi,*' Dec. Dig, {Key-No,) S ^; Cent. Dig. {§ S5^0; '*ContracU,^ Cent. 
Dig, S 929, 

X MulhoUand y. Bartlett, 74 111. 58; Bates v. Sandy, 27 111. App. 652; United 
States Mortgage Co. v. Henderson, 111 Ind. 24, 12 N. E. 88 ; Russell v. Wright, 
98 Ala. 652» 13 South. 594 ; Fink y. Smith, 170 Pa. 124, 32 Ati. 566, 50 Am. 
St Rep. 750; PalTrey y. Railroad Ck)., 4 Allen (Mass.) 55; fichroeder y. Fink, 
60 Md. 436 ; Emmittsburg R. Ck>. y. Donoghue, 67 Md. 883, 10 AtL 233, 1 Am. 
St Rep. 396; Daylsson y. Ford, 23, W. Va. 613; GUne y. Templeton, 78 Ky. 
550 ; Gunning y. Royal, 59 Miss. 45, 42 Am. Rep. 350 ; Price y. Bank, 62 Kan. 
743, 64 Pac. 639. Bee ^'Compromise and Settlement;* Dee. Dig, (Key-No,) ( 6; 
Cent. Dig. U S&-60; **Contraot8/* Deo. Dig. {Key-No.) | 68; Cent. Dig. || S28- 
SSO. 

s See cases dted infra, notes 4, 5. 

• SMITH y. FARRA, 21 Or. 395, 28 Pac. 241, 20 L. R. A. 115, Throckmorton 
Gas. Contracts, 109; Crans y. Hunter, 28 N. T. 389; Zoebisch y. Von Minden, 
120 N. Y. 406, 24 N. E. 795 ; Orandln y. Grandin, 49 N. J. Law, 508, 9 Atl. 756, 
60 Am. Rep. 642; Rue y. Meirs, 43 N. J. Eq. 877, 12 Atl. 369; Bellows y. 
Sowles, 65 y t 391, 45 Am. Rep. 621 ; Hewett y. Currier, 63 Wis. 386, 23 N. 
W. 884; Appeal of Qormley, 130 Pa. 467, 18 AtL 727; Hansen y. Gaar, Scott 
A Co., 63 Minn. 94, 65 N. W. 254 ; Dl lorio y. Di Brasio, 21 R. I. 208, 42 Aa 
1114 ; Hanchett y. lyes, 171 111. 122, 49 N. E. 206 ; Rowe y. Barnes, 101 Iowa, 
302, 70 N. W. 197; GALUSHA y. SHERMAN, 105 Wis. 263, 81 N. W. 495, 47 
L. R. A. 417, Throckmorton, Cas. Contracts, 200. See "Compromise and Set- 
tlement,'* Deo. Dig. {Key-No.) t 6; Cent. Dig. §( 55^0; ''Contracts," Cent. Dig. 
%S29. 

« CalHsher y. Blschoffsheim, L. R. 5 Q. B. 449. See, also, Cook y. Wright, 1 
B. & S. 559. See **Coni4>romise and Settlement,** Deo. Dig. (Key-No.) S S; 



156 CON8IDBBATION (Ch. & 

case it was said : ''If there is in fact a serious claim honestly made, 
the abandonment of the claim is a good consideration. ♦ ♦ ♦ 
Now, by *honest claim/ I think. is meant this: that a claim is hon- 
est if the claimant does not know that his claim is unsubstantial, 
or if he does not know facts, to his knowledge unknown to the 
other party, which show that his claim is a bad one." • These cases 
thus allow the whole question to depend on the good faith of the 
party forbearing, without any regard whatever to the validity of 
his claim. . 

Admitting that forbearance from what one is not legally entitled 
to do is no consideration, it may be said that one has a right to as* 
sert or litigate a claim in which he believes, and that forbearance 
from this right is a consideration. 

SAME— DOING WHAT ONE IS BOUND TO DO 

74. IN GENERAL. Doing or promising what one is already le* 

gaily bound to do is, as a rule, no consideration. Such 
previous obligation may arise 

(a) By virtue of a prior contract, or 

(b) By law, independently of contract. 

75. ADDITIONAL COMPENSATION. In some jurisdictions, a 

promise to perform, or performance of, an existing con- 
tract, is held to be consideration for a promise by the oth- 
er party to pay additional compensation; and in some 
jurisdictions such promise to perform or performance is 
held to be consideration for a promise by a third person 
to pay additional compensation. 

76. PART PAYMENT IN SATISFACTION OF DEBT. Under 

t he g;eneral rule, pa^rment of part of, a. dfiblift no consi d- 
eration for a discharge of the debt. 

Another form of unreality of consideration is where the alleged 
consideration is ^ promise to do, or actually doing, what a person 
is already bound to do. The promisor gets no more in return for 
his promise than the promisee was already bound to give, and 
therefore receives no consideration.* Such prior obligation may 

Cent Dig. H SS-^0; ''Contracts^* Dec. Dig. (Key-No.) ( 68; Cent Dig. U 

6 Miles ▼. New Zealand, etc., Ck>., 82 Ch. D. 266, per Cotton, L. J. Bee 
**Oompromise and Settlement,** Dec, Dig. (Key-No,) ( 6; Cent. Dig. H S5--50; 
^'Contracts,** Dec. Dig. (Key-No.) ( 68; Cent. Dig. 8§ 328-SSO. 

« CoDover v. StiUweU, 84 N. J. Law, 64 ; Jennings v. Chase, 10 Allen (Mass.) 
626; Warren ▼. Hodge, 121 Mass. 106; Schnler v.. My ton, 48 Kan. 282» 29 



t§ 74-76) DOING WHAT ONE IS BOUND TO DO 157 

arise (1) from a previous contract, or (2) from law, independently 
of contract. ^ 

Where, for instance, a seaman deserted a vessel, and the captain 
promised the rest of the crew extra pay if they would work the 
vessel home, the promise was held to be without consideration, 
because the seamen had, before sailing, agreed to do all they could 
under all the emergencies of the voyage, and the desertion by some 
of the seamen was an emergency. Here the seamen promised no 
n?ore than their contract bound them to do.^ Where a public 
officer is required by law to make an arrest, a promise by an in- 
dividual to pay him for doing so is without consideration ; * and 
so it is with a promise to pay a public officer or a witness extra 

Paa 163; Holmes v. Boyd, 90 Ind. 832; Keffer v. Grayson, 76 Va. 617, 44 
Am. Rep. 171 ; Harris t. Cassaday, 107 Ind. 158, 8 N. E. 29 ; Stuber ▼. Schack, 
83 111. 191;. Phoenix Ins. Ck>. ▼. Hink, 110 HI. 638; Harriman v. Harriman, 
12 Gray (Mass.) 841 ; Tucker v. BarUe, 86 Mo. 114 ; Eblln y. Miller's Ex'rs, 
78 Ky. 871; Sherwln v. Brigham, 39 Ohio St 137; Watts v. Frenche, 19 
N. J. Eq. 407 ; Bush ▼. Rawlins, 89 Ga. 117, 14 S. E. 886 ; Jenness v. Lane, 26 
Me. 475; Wendover v. Baker, 121 Mo. 273, 25 S. W. 918; Arend y. Smith, 
151 N. Y. 502, 45 N. E. 872 ; Allen v. Plasmeyere, 3 Neb. (Unof.) 187, 90 N. W. 
1125; Barringer v. Ryder, 119 Iowa, 121, 93 N. W. 66; Wescott v. Mitchell, 96 
Me. 377, 60 AtL 21. On this principle, a promise by a creditor after maturity 
of the debt, to extend the time of payment, is not binding unless some collat- 
eral consideration is received. Hoffman ▼. Coombs, 9 GUI (Md.) 284; Tarn- 
bnll ▼. Brock, 81 Ohio St 649 ; Pf eiffer ▼. Campbell, 111 N. Y. 631, 19 N. E. 
498 ; Holmes ▼. Boyd, 90 Ind. 332 ; Ives ▼. Bosley, 35 Md. 262, 6 Am. Rep. 411 ; 
Helms y. Crane, 4 Tex. Ciy. App. 89, 23 S. W. 392; Skinner ▼. Mining Co. 
(C. C.) 96 Fed. 736. A promise to extend In consideration of a promise to pay 
the debt with Interest at the same rate is without consideration. Kellogg ▼. 
Olmsted, 25 N. T. 189 ; Olmstead ▼. LaUmer, 168 N. Y. 813, 63 N. E. 6, 43 li 
R. A. 686; Wilson y. Powers, 130 Masa 127; Holmes v. Boyd, 90 Ind. 332; 
Price ▼. Mitchell, 23 Wash. 742, 63 Pac. 614. 

It has been held, however, that a promite to extend is supported by a 
promise to pay Interest at the same, or even a less rate, for a certain time, 
since the debtor foregoes his right to pay before that time. Fawcett ▼. Fresh- 
water, 81 Ohio St 637; Fowler y. Brooks, 13 N. H. 240; Simpson ▼. Evans, 
44 Minn. 419, 46 N. W. 90S. See, also, Moore v. Redding, 69 Miss. 841, 13 
South. 849. See ^'Contracts,'' Dec. Dig. (Key-No.) ( 75; Cent. Dig. SS 273-285. 

T Stilk V. Meyrick, 2 Camp. 317. See, also, Harris v. Carter, 3 EL & Bl. 
559; Bartlett v. Wyman, 14 Johns. (N. Y.) 260; Vanderbllt v. Schreyer, 91 N. 
Y. 392. It would have been different if risks had arisen which were not con- 
templated by the contract For instance, such a contract as in the case cited 
contains an implied warranty that the ship shall be seaworthy. So, where a 
seaman had signed articles of agreement to navigate a vessel, and the vessel 
proved unseaworthy, a promise of extra pay to induce him to abide by his 
eontract was held binding. Turner v. Owen, 3 Fost & F. 177. Bee **Con- 
tracur Dec Dig. (Key-No.) S 75.; Cent. Dig. §§ 27S-285. 

s Smith v. Whlldin, 10 Pa. 39, 49 Am. Dec 572 ; Hogan v. Stophlet, 179 III. 
160, 53 N. E. 604, 44 L. R. A. 809. See post, p. :)52. See "Contracta,'* Dec 
Dig. (Key-No.) { 75; Cent. Dig. §§ 278^85. 



158 CONSIDERATION (Ch. 5 

coinpensation for performing services for which his fees are fixed 
by law.* In these cases the officer or witness does no more than 
he is required by law to do, and therefore gives no consideration. 
Of course, it is otherwise with agreements to pay officers for doing 
something beyond the scope of their official duties.** The doctrine 
also applies to a promise to do or doing what one may be com- 
pelled to do in equity.** It will be seen from the cases mentioned 
that the actual performance of that which a man is legally bound 
to do stands on the same footing as his promise to do What he is 
legally compellable to do. 

The rule above stated would seem to be an obvious result of the 
doctrine of consideration, but some of its applications have met 
with severe criticism, and there is much direct conflict in the 
decisions on the subject. 

Mutual Discharge and Substituted Agreement — Additional Compen- 
sation 
In the case of a contract which is wholly executory, — ^that is, 
a contract in which there is something to be done on both sides, 
— it can, as we shall see in treating of discharge of contract, be 
discharged by mutual consent. The acquittance of each from the 
other's claims in such a case is the consideration of each to waive 
his own.** If parties can so discharge the contract, it follows 
that they may substitute a new contract in its place. Suppose, 
however, that one of the parties to a contract refuses to perform, 
because he finds that he must suffer a loss by performance; and 
suppose the other party wishes performance, and requires it to 
prevent serious loss. Would a promise, made by him in order to 
induce the other to perform, of more than he was liable to pay 
or do under the original contract, be binding, or would it be void, 
on the ground that the only consideration for it is the promise by 
the other to perform the original contract, — a thing which he was 
already bound to do? The courts differ in their answers to this 
question.** 

• See Lucas ▼• Allen, 80 Ey. 681 ; Hatch ▼. &f ann, 15 Wend. (N. T.) 45. 
Since a witness, however, cannot be compelled to attend In another state, a 
party's promise of extra compensation to induce him to attend is binding. 
Armstrong y. Prentice, 86 Wi& 210, 56 N. W. 742. See ''Contracts,*' Dec, Dig. 
(Key-No.) S 76; Cent. Dig. {§ 27S-285. 

10 England v. Dayidson, 11 Adol. & E. 856; McCandlesa v. Steel Co., 152 
Pa. 130, 25 AtL 679 ; Studley t. Ballard, 169 Mass. 295, 47 N. E. 1000, 61 Am. 
St Rep. 286. See ''Contracts;* Deo. Dig. (Key-No.) | 75; Cent. Dig. §( 27S-285. 

11 Robinson v. Jewett 116 N. Y. 40, 22 N. E. 224. See "Contracts,*' Dee. 
Dig. (Key-No.) | 75/ Cent. Dig. SS 279-285. * 

IS Post, p. 526. ^* See infra, notes 14-17. 



S§ 74-76) DOING WHAT ONE IS BOUND TO DO 1^9 

Some courts hold, in accordance with the general rule, that the 
promise of extra compensation is without consideration and void.** 
In some of these jurisdictions, however, an exception has been 
recognized where the new promise is made on account of unfore- 
seen an<^ substantial difficulties in the performance of the con- 
tract.*** In the language of the leading case recognizing the ex- 
ception,** "where the party refusing to complete his contract does 
so by reason of some unforeseen and substantial difficulties in the 
performance of the contract, which wet^e not known or anticipated 
by the parties when the contract was entered into, and which 
cast upon him an additional burden not contemplated by the par- 
ties, and the opposite party promises him extra pay for benefits 
if he will complete his contract, and he so promises, the promise 
to pay is supported by a valid consideration. In such a case the 
natural inference arising from the transaction, if unmodified by 
any equitable considerations, is rebutted, and the presumption 
arises that by the voluntary and mutual promises of the parties 
their respective rights and obligations under the original contract 
are waived, and those of the new or modified contract substituted 
for them." 

Other courts hold outright that, even where there is nothing 
more than refusal on the part of one party to perform, a new agree- 
ment, in which the other, to induce him not to break, but to go 
on with, his contract, promises to pay him a larger sum than orig- 
inally promised, at least if it is in substitution of the original 
contract, is binding.*^ Some of these courts base their decision 

I* KING v. BAILWAT CO., 61 Minn. 482, 63 N. W, 1105, Throckmorton Caa. 
Contracts, 115; Vanderbilt v. Schreyer, 91 N. Y. 392; Reynolds ▼. Nugent, 25 
Ind. 328; Erb y. Brown, 69 Pa. 216; Ayres v. Railway Co., 62 Iowa, 478, 
3 N. W. 522 : McCarthy v. Association, 61 Iowa, 287, 16 N. W. 114 ; Cobb y. 
Cowdery, 40 Vt 25, 94 Am. Dec. 870; Keith v. Miles, 39 Miss. 442, 77 Am. 
Dec 685; Gaar, Scott & Co. y. Green, 6 N. D. 48, 68 N. W. 318; Jones y. Ris- 
ley, 91 Tex. 1, 32 S. W. X027 ; Main St & A. P. R. Co. y. TractiQn Co., 129 
CaL 801, 61 Paa 937 ; Westcott y. Mitchell, 95 Me. 377, 50 Atl. 21 ; Alaska 
Packers' A8S*n y. Domenico, 117 Fed. 99, 54 C. C. A. 485; Lingenfelder y. 
Brewing Co., 103 Mo. 578, 15 S. W. 844. See '*Contraot8,*' Dec. Dig. (Key-No.) 
H 2S7, ZH; Cent. Dig. U 1119-1122, 1128. 

It KING Y. RAILWAY CO., 61 Minn. 482, 63 N. W. 1105, Throckmorton 
Caa. Contracts, 115 ; Unz y. Schuck, 106 Md. 220, 67 Atl. 286, 11 L. R. A. (N. 
8.) 789 and note, 124 Am. St Rep. 481, 14 Ann. Cas. 495 and note; Meech y. 
City of BufTalo, 29 N. Y. lOa See **Contract8," Deo. Dig. {Key-Vo.) U 75, 257; 
Cent. Dig. §{ £75-285, 1119-1122, 

!• KING Y. RAILWAY CO., 61 Minn. 482, 63 N. W. 1106, Throckmorton, 
Cas. Contracts, 115, per Start, C. J. See **Coniract8,** Deo. Dig. (Key-No.) §§ 
75, 2S7; Cent. Dig. |§ 219-285, 1119-112S. 

IT Monroe y. Perkins, 9 Pick. (Biasa) 298, 20 Am. Dec. 475 ; Rollins y. Bifirsh, 



160 CONSIDERATION (Ch.6 

on the ground that a person who has entered into a contract is 
entitled to choose between going on with it at a loss and the 
risk of an action by the other party for the breach. This might 
be a sound doctrine if a contract were, according to Mr. Justice 
O. W. Holmes, Jr.'s,^* conception of it, the mere taking of a risk ; 
that is, if a party must be held to contemplate, when he gives 
a promise, not its performance, but the payment of damages for 
its breach, or performance, at his option, according as the one or 
the other may seem the mort to his interest in the light of future 
developments. Such, however, does not seem the proper concep- 
tion of contract Certainly, as a rule, when a man makes a con- 
tract, he does so with the intention of performing it, and with the 
expectation of performance by the other party. If cannot be that 
a contract is nothing more than a mere gambling transaction — 
a mere bet on its performance. To allow a man who has prom- 
ised, on a sufficient consideration, to repudiate his promise when 
he finds that he is to suffer loss, and force the other party to 
pay an additional sum in order to obtain what he is already 
entitled to, encourages breach of contract and breach of faith. 

Promise to Third Person to Perform Existing Contract 

In England and Massachusetts it has been held that if a man 
is bound by a contract to do a particular thing, and, while it is 
doubtful whether he /will do it, a third person promises to pay 
hin^ if he will do it, his performance will constitute a sufficient 
consideration for the third party's promise.^* It is difficult, if 
not impossible, to reconcile such a case with the general rule 
which we have stated, or to find any reason for such an exception. 
In this country the contrary has been generally held.** 

128 Mass. 116 ; Osborne ▼. C'ReUly, 42 N. J. Bq. 467, 9 Aa 209 ; Moore v. 
Locomotive Works, 14 Mich. 266 ; Goebel ▼. Unn, 47 Mich. 489, 11 N. W. 2S4, 
41 Am. Rep. 723 ; Coyner v. Lynde, 10 Ind. 282 ; Cooke v. Murphy, 70 111. 96 
(but see Moran v. Peace, 72 lU. App. 135); Ck>nnelly v. Devoe, 37 Conn. 570; 
Lawrence ▼. Davey, 28 Vt 264 ; Lattimore v. Harsen, 14 Johns. (N. Y.) 330 ; 
Foley ▼. Storrle, 4 Tex. Civ. App. 877, 23 S. W. 442 ; Scanlon v. Northwood, 
147 Mich. 139, 110 N. W. 493; Courtenay v. Fuller, 65 Me. 156. See **Oon^ 
tracts," Dec. Dig, (Key-No.) $S 75, 2S7; Cent. Dig. (t 27S-2S5, 1119-1122. 

IS Holmes, The Common Law, 301. 

i» ShadweU v. Shad well, 9 C. B. (N. S.) 159; Scotson v. Pegg, 6 Hurl, ft N. 
295; Abbott v. Doane, 163 Mass. 433, 40 N. B. 197, 34 L. R. A. 33, 47 Am. 
St Rep. 465; Cf. Grant v. Railway Co., 61 Minn. 395, 63 N. W. 1026. See 12 
Harv. Law Rev. 520. See ''Contracts;* Deo. Dig, {Key-No.) I 74; Cent, Dig. 
§§ SSl-^^S. 

so Johnson's Adm'r y. Sellers' Adm'r, 83 Ala. 265; Putnam ▼• Woodbury, 
68 Me. 58; L'Amoreux v. Gould, 7 N. Y. 349, 57 Am. Dec 524; Peejiraan v. 
Peelman, 4 Ind. 612 ; Merrick v. Glddlngs, 1 Mackey (12 D. C.) 394 ; Davenport 
▼. Society, 88 Wis. 887; Gordon ▼• Gordon, 66 N. H. 170; Hanks ▼. Barron* 95 



§§ 74r-76) DOING WHAT ONE IS BOUND TO DO 161 

Part Payment in Satisfaction of Debt 

Under the rule we have been discussing, the simple payment of 
a smaller sum in satisfaction of a larger is not a good discharge 
of a debt, for it is doing no more than the debtor is already bound 
to do, and is therefore no consideration for the creditor's promise 
to forego the residue.*^ If, for instance, a person owes another 
$1,000, the payment of which may be demanded at once, a prom- 
ise by the creditor to take $500 in full, and its payment, will not 
prevent his afterwards recovering the other $500. 

This rule is well established and continues to be rec6gnized 
by the courts.** It has, however, been the object of frequent and 
severe criticism, as failing to take into consideration the practical 
importance of the difference between a right to a thing and the 
actual possession of it, and as serving to defeat the ends of justice 
and common honesty.** This general feeling as to the injustice 

Tenn. 275, 32 S. W. 105 ; Havana Press DrlH Co. y. Ashnrst, 148 lU. 115, 85 
N. E. 878. See, also, Brownlee t. Lowe, 117 Ind. 420, 20 N. B. 301. Bee 
**Contraets,** Dec. Dig. (Key-7fo,) | 74; Cent. Dig. If SS1-S43, 

SI Pinners Case, 5 Coke, 117a ; Cumber t. Wane, 1 Strange, 426, 1 Smith, 
Lead. Cas. 489; JAFFRAY v. DAVIS, 124 N. Y. 164, 26 N. B. 851, 11 L. R. 
A. 710, Throckmorton Cas. Contracts, 120 (collecting cases) ; Harriman y. Har- 
rlman, 12 Gray (Mass.) 841 ; BaUey t. Day, 26 Me. 88 ; Goodwin y. Follett, 
25 Vt 386 ; Barron y. Vandyert, 13 Ala. 232 ; Hayes y. Insurance Co., 125 Hi. 
626, 18 N. jS. 322, 1 L. R A. 303 ; Harrison y. Close, 2 Johns. (N. Y.) 448, 3 
Am. Dec 444 ; Bender y. Been, 78 Iowa, 263, 43 N. W. 216, 5 L. R. A. 649 ; 
Leeson y. Anderson, 99 Mich. 247, 58 N. W. 72, 41 Am. St Rep. 597 ; Bryan y. 
Foy, 69 N. C. 45 ; Carlton y. Railroad Co., 81 Ga. 531, 7 S, B. 623 ; Liening y. 
Gould, 13 Cal. 598; Watts y. Frenche, 19 N. J. Bq. 407; Beayer y.'Fulp, 136 
Ind. 595, 36 N. E. 418; Lankton y. Stewart, 27 Minn. 846, 7 N. W. 360; Wil- 
lis y. GammUl, 67 Mo. 730 ; St Louis, F., S. & W. R. Co. y. Dayis, 36 Kan. 
464, 11 Pae 421 ; Reynolds y. Reynolds, 55 Ark. 369, 18 S. W. 377 ; Bmmitts- 
burg R. Co. y. Donoghue, 67 Md. 383, 10 Atl. 233, 1 Am. St Rep. 396 ; Tyler y. 
Association, 145 Masa 134, 18 N. B. 360; Mcintosh y. Johnson, 51 Neb. 83, 
70 N. W. 522. And see cases dted in note 6, supra. Foir the same reason, 
a promise to take less than the sum due is also without consideration. Mc- 
Kenzie y. Culbreth, 66 N. C. 534 ; Foakes y. Beer, L. R. 9 App. Cas. 605 ; 
Ro6e y. Daniels, 8 R. I. 881 ; Smith y. Phillips, 77 Va. 548 ; Bryan y. Brazil, 
52 Iowa, 350, 3 N. W. 117; Hart y. Strong, 183 IU.:349, 55 N. B. 629. Nor is 
part payment any consideration for an agreement to extend the time for pay- 
ment of the residue. HoUiday y. Poole, 77 Ga. 159 ; Liening y. Gould, 13 (}al. 
698; Barron y. Vandyert 13 Ala. 232; TumbuU y. Brock, 31 Ohio St 649. 
And see post, p. 614. See "Accord and Satisfaction,** Dec. IHff. (Key-No.) | 8; 
Cent. Dig. U 60^5. 

22 Fuller y. Kemp, 138 N. Y. 231, 33 N. B. 1034, 20 L. R. A. 785 and note; 
Melroy y. Kemmerer, 218 Pa. 381, 67 Atl. 699, 11 L. R. A. (N. S.) 1018, 120 
Am. St Rep. 888 and note. And see cases dted supra, note 21. Bee ** Accord 
and Satisfaction,** Deo. Dig. (Key-No.) ft 8; Cent. Dig. |§ 60-^5. 

23 See Two Theories of Consideration by Prof. James Barr Ames, 12 Hary. 
L. R. 516, 625; Chicago, M. & St P. Ry. y. Clark, 178 U. S. 858, 20 Sup. Ct 

Olabk CoifT.(3D Bd.>— 11 



162 CONSIDERATION (Ch. 6 

of the rule has led the courts to narrow its scope wherever possi- 
ble, and they have accordingly laid hold upon the slightest circum- 
stances to take a case out of its operation.** Thus it has been 
held not to apply to unliquidated debts,** or where the payment 
is made before maturity, or at a different place from that at which 
the debtor was bound to make it,*' or where an insolvent debtor 
in reliance on the creditor's promise to receive the pf rt payment 
in satisfaction of the whole debt, refrained from taking advantage 
of the insolvency or bankruptcy law.*^ 

50 it has been held that since a person may, if he choose, make 
a gift to another which when accepted will be irrevocable, a cred- 
itor may, on receiving part of the debt, forgive the debtor the 
residue, and that a receipt in full may be evidence of such for- 
giveness.** In at least one jurisdiction the court has gone so far 
as to repudiate the rule altogether; ** and in some states the rule 
has been changed by statute so that acceptance of a less sum 
in satisfaction of a debt is a discharge.*' 

Since a contract under seal requires no consideration, a creditor, 
on receiving part payment of his debt, may release the residue 
by an instrument under seal.** 

924, 44 L. Ed. 1009 ; Melroy y. Kemmerer, 218 Pa. 8Sl, 67 Atl. 099, 11 L. R. 
A. (N. S.) 1018, 120 Am. St Rep. 888 ; First Nat Bank of NashylUe ▼. Shook, 
100 Tenn. 436, 45 S. W. 838 ; Brown t. Kern, 21 V^ash. 211, 67 Pac. 79a Bee 
''Accord and Satisfaction,** Dec, Dig, (Key-No,) | 8; Cent, Dig. |§ 60-65, 

«* See post,162-165. ** See post, 164. «• See post, 163. 

2T Melroy t. Kemmerer, 218 Pa. 381, 67 Att 699, 11 L. R. A. (N. S.) 1018, 120 
Am. St Rep. 888; Herman t. Schleslnger, 114 Wis. 382, 90 N. W. 460, 91 
Am. St Rep. 922; Rotan Grocery Ck>. y. Noble, 36 Tex. CIt. App. 226, 81 S. 
W. 686. Bee "Accord and Satisfaction,** Doc Dig, {Key-No.) §| 8, 10; Cent. 
Dig. §§ 60-74, 

2t McKEI^ZIB ▼. HARRISON, 120 N. Y. 260, 24 N. E. 468, 8 L. R. A. 257, 17 
Am. St Rep. 638, Throckmorton Oaa. Contracts, 865; Green t. Langdon, 28 
Mich. 221 ; Tyler Cotton Press Co. y. Chevalier, 66 Ga. 494. See, also, Lam- 
prey ▼. Lamprey, 29 Minn. 151, 12 N. W. J514. A receipt "In full of all de- 
mands," given because the other party refused to pay more without it, held 
binding. Flynn y. Hurlock, 194 Pa. 462, 45 Atl. 312. Bee **Aceord and Satis- 
faction,** Dec. Dig. (Key-lSo.) t It; Cent. Dig, |§ 9Z-96. 

2» Clayton ▼. Clark, 74 Miss. 499, 21 South. 565, 37 L. R. A. 771, 60 Am. St 
Rep. 521. Bee ** Accord and Satisfaction** Dec Dig. {Key-No.) i 12; Cent, Dig. 
|§ 92--96, 

so This is the case in Alabama, Maine, North Carolina, Virginia, and Geor- 
gia. See Tiddy ▼. Harris, 101 N. C. 589, 8 S. B. 227 ; Jones t. Wilson, 104 N. 
C. 9, 10 S. E. 79. Bee '^Accord and Satisfaction,** Dec. Dig. {Key-No,) | 12; 
Cent. Dig, || 92-96. 

51 Bender v. Sampson, 11 Mass. 42; Willing t. Peters, 12 Serg. & R. (Pa.) 
177 ; Ingersoll v. Martin, 58 Md. 67, 42 Am. Rep. 822 ; Spitze ▼. Railroad Co., 
75 Md. 162, 23 AU. 807. 32 Am. St Rep. 87a Bee **Release,** Deo. Dig. {Key- 
No.) I 12; Cent. Dig. |§ 18-20. 



§§ 74r-76). DOING WHAT ONE IS BOUND TO DO 163 

Same — Consideration for Release of Residue 

The rule that part payment of a debt does not discharge the 
debtor does not apply where the creditor, in addition to the part 
payment, receives something else which the law regards of value, 
or, in other words, where, in the thing done or given, he receives 
something different in kind from that which he is entitled to de- 
mand ; •* and if the diflFerence is real, so that something of value 
is superadded to the part payment, the fact that the difference or 
the value superadded is slight will make no difference, for, as 
we have seen, the courts will not determine the adequacy of the 
consideration. If a man sells and becomes bound to deliver to 
another two p^articular horses, delivering one of them will not 
sustain a promise by the buyer not to require delivery of the 
other; but it would be otherwise if the buyer agreed to receive 
some other particular horse or cow in discharge of the contract, 
though it might be of comparatively little value. A money debt 
may be discharged by the giving of a negotiable instrument for 
a less sum than due, or, as said in an old English case, "the gift 
of a horse, hawk, or robe, etc., in satisfaction, is good; for it 
shall be intended that a horse, hav^k, or robe, etc., might be more 
beneficial to the plaintiff than money, in respect of some circum- 
stance, or otherwise the plaintiff would not have accepted of it in 
satisfaction." •• 

If the debtor gives, and the creditor receives, in full satisfaction 
of the debt, the note of a third person for a smaller sum than the 
amount of the debt, there is a sufficient consideration for his prom- 
ise to forego the residue ; •* and so it is where the smaller sum 
agreed to be taken is guarantied, or a note therefor is indorsed, 
by a third person; ** or where the smaller sum is paid before the 

•t JATFRAT T. DAVIS, 124 N. Y. 164, 26 N. B. 351, 11 L. R. A. 710, Throck- 
morton Caa. Contracts, 120; Day t. Gardner, 42 N. J. Eg. 190, 7 AtL 365; 
Stacy T. Ck>ok, 62 Kan. 60, 61 Paa 899. See ** Accord and BatUfaction,** Dec, 
Dig. (Key-No,) | 8; Cent. Dig. %% €0-65. 

«s Pinnel's Case, 6 Coke, 117a. And see Hasted t. Dodge (Iowa) 85 N. W. 
462. See *'Aocord and BatiBfaciion,** Deo. Dig. {Key-No.) i 8; Cent Dig. SS 
60-65. 

«4 Brooks T. White, 2 Mete. (Mass.) 283, 87 Am. Dee. 95 ; Kellogg T. Rich- 
ards, 14 Wend. (N. T.) 116; Sanders ▼. Bank, 18 Ala. 353; Hardesty y. Gra- 
bam (Ky.) 8 S. W. 909. Check of third person. GuUd v. Butler, 127 Mas& 
88a Bee "Accord and Satisfaction,** Deo. Dig. {Key-No.) SI 9, 11; Cent. Dig. 
H 88-91, 75-8Z. 

•» Steinman t. Magnus, 11 East, 890; Singleton y. Thomas, 73 Ala. 205; 
Jennees v. Lane, 26 Me. 475 ; Maddux v. Bevan, 39 Md., at page 499 ; Boyd 
T. Hitchcock, 20 Johns. (N. Y.) 76, 11 Am. Dec 247 ; Vamey v. Ck>nery, 77 Me. 
627, 1 AtL 683 ; Mason t. Campbell, 27 Minn. 64, 6 N. W. 405. Bee ^'Accord 
BaHtf action,'' Dee. Dig. {Key-No.) ft 9, 11; Cent. Dig. SS 88^1. 



164 CONSIDERATION (Ch. 5' 

debt IS due, or at a different place than required by the contract ; •• 
or where a note secured by a mortgage is given for the smaller 
sum.*^ 

Same — Unliquidated Claim 

The rule that payment of less than the amount claimed is no 
consideration for a discharge applies only when the sum due is 
definite and certain. The payment of less than the amount claim- 
ed, if the sum due is unliquidated, is a good consideration for the 
release.** This proceeds upon the ground that the parties have 
agreed to settle an unliquidated claim, or, in other words, have 
agreed on an accord and satisfaction of such claim.** 

Same — Compromise 

We have already seen, in treating of forbearance as a consid- 
eration, that where a demand is made and disputed, or a suit is 
brought, the pai'ties may enter into a compromise, and that the 
party upon whom the demand is made or against whom the suit 
is brought will be bound thereby. The consideration for his 
promise is the forbearance of the other party to insist on his orig- 
inal demand, or to further prosecute his action.^* In such a case 
the creditor or plaintiff is also bound by the compromise. The 
settlement of the dispute and definite promise by the debtor is 
a consideration for his promise to forego any -further claim. He 

••Plnnel's Case, 5 Gok^ 117a; Brooks t. White, 2 Mete. (Mass.) 283, 87 
Am. Dec. 95; Harper t. Graham, 20 Ohio, 105; Schweider t. Lang, 29 Minn. 
254, 18 N. W. 83, 43 Am. Rep. 202 ; McKenzie v. Cnlbreth, 66 K. C. 534 ; Jonea' 
T. Perkins, 29 Miss. 139, 64 Am. Dee. 136 ; Reid v. Hibbard, 6 Wis. 175 ; Chicora 
Fertilizer Co. t. Donan, 91 Md. 144, 46 Atl. 347, 50 L. R. A. 401. Cf. Saun- 
ders y. Whitcomb, 177 Mass. 457, 59 N. E. 192. Bee *'Accard and Satis facHon,** 
Deo. Dig. (Key-No.) tS 9, 11; Cent, Dig. S§ 15-91. 

»T JAFFRAY T. DAVIS, 124 N. T. 164, 26 N. E. 351, 11 L. R. A. 710, Throck- 
morton Cas. Contracts, 120; Post y. Bank, 138 III. 559, 28 N. E. 97a See 
''Accord and Satisfaction,*' Dec. Dig. (Key-No.) §§ 9, 11; Cent. Dig. %% 75-91. 

ssWUkinson y. Byers, 1 Adol. & E. 106; Baird y. United States, 96 U. S. 
430, 24 L. Ed. 703; Goss y. Ellison, 136 Mass. 503; Potter y. Douglass, 44 
Conn. 541; Riley y. Kershaw, 52 Mo. 224; Ogbom y. Hoffman, 52 Ind. 439; 
Fuller y. Kemp, 138 N. Y. 231. 33 N. E. 1034, 20 L. R. A. 785; Sanford y. 
Abrams, 24 Fla. 181, 2 South. 373; Berdell y. Blssell, 6 Colo. 162; Stearns y. 
Johnson. 17 Minn. 142 (Gil. 116) ; Tanner y. Merrill, 108 Mich. 58, 65 N. W. 
664, 31 L. R A. 171, 62 Am. St Rep. 687 ; Nassoiy y. Tomlinson, 148 N. T. 
32C, 42 N. E. 715, 51 Am. St Rep. 695 ; Ostrander y. Scott 161 111. 339. 43 N. 
E. 1089 ; Chicago, M. & St P. Ry. y. Clark, 178 U. S. 353, 20 Sup. Ct 924, 44 
L. Ed. 1099. But see Huff y. Logan (Ky.) 60 S. W. 483. See ''Accord and Sat- 
isfactionr Dec. Dig. {Key-No.) § 10; Cent. Dig. $| 67-74. 

»» Tompkins y. Hill, 145 Mass. 379, 14 N. E. 177; post p. 615. See '* Accord 
and Satisfaction,** Dec. Dig. {Key-No.) § 10; Cent. Dig. {§ (Tt-lJ^ 

*o Aute, p. 150. 



/ 



§§ 74-76) DOINO WHAT ONE IS BOUND TO DO 165 

.cannot disregard the compromise on the ground that the debtor 
promised only what he was already bound to do.** 

Same — Accord and Satisfaction 

Whether the sum due is certain or uncertain, the consideration 
for the promise to forego the residue of the debt must be executed. 
It is not enough that the parties are agreed. Their agreement 
musjt be carried out if it is to be an answer to the original cause 
of action. Where it has been carried out, it is an accord and sat- 
isfaction. Where it has not been carried out it is an accord execu- 
tory. - As .said in an old case : "Accord executed is satisfaction ; 
accord executory is only substituting one cause of action in the 
room of another, which might go on to any extent."** This is 
a subject, however, which relates to the discharge of contract.*' 

Same — Composition with Creditors 

A composition with creditors, whereby eadi creditor agrees to 
receive a certain proportion of the sum due him, seems, at first 
thought, to be an infraction of the rule that part payment of a 
debt is no discharge unless there is some consideration in addi- 
tion to the part payment for the promise to forego the residue. 
The promise of the debtor to pay, or payment by him, of a portion 
of the debt, is not the consideration for the promises of the cred- 
itors to forego the balance.** The consideration must be and is 
something more than this. 

In a leading English case Parke, J., said : "Here each creditor 
entered into a new agreement with the defendant [the debtor], 
the consideration of which, to the creditor, was the forbearance 
by all the other creditors who were parties, to insist upon their 
claims." *• The view that the promise of each creditor is sustain- 
ed by the consideration moving from the others has been frequent- 

•1 Truax t. MUler, 48 Minn. 62, 60 N. W. 935 ; Slsson ▼. City of Baltimore, 
61 Md. 83 ; Ogbom t. Hoffman, 52 Ind. 430 ; McCall v. Nave, 52 Miss. 494 ; 
Union Pac. R. Co. ▼. Anderson, 11 Colo. 298, 18 Pac. 24; Perkins v. Headley, 
49 Ma App. 666; Gates y. Steele, 68 Conn. 316, 20 Atl. 474, 18 Am. St Rep. 
268; Battle T. McArthur (C. C.) 49 Fed. 716; Northern Liberty Market Co. 
T. KeUy, 113 U. S. 199, 5 Sup. Ct 422, 28 L. Ed. 948 ; Slade t. Elevator Co., 89 
Neb. 600, 68 N. W. 191 ; Town of Brandon v. Jackson, 74 Vt 78, 52 Aa 114 ; 
Ehinbar ▼. Dunbar, 180 Mass. 170, 62 N. E. 248, 94 Am. St Rep. 623. See ''Con- 
tracts;* Dec. Dig. (Key-No.) | 68; Cent. Dig, S| 828-830. 

42 Lynn v. Bruce, 2 H. Bl. 319. See "Accord and Satisfaction,*' Dec. Dig. 
(Key-No.) § 16; Cent. Dig. S§ 116-122. 

*» Post, p. 616. 

44 Fitch ▼. Sutton, 6 East, 230. See **Compo9itione icith Creditore,^ Dee. 
Dig. (Key-No.) | 8; Cent. Dig. ft 8. 

4B Good V. Cheesman, 2 Bam. & Adol. 335. See **CompoBition$ tvith Credi- 
tors,'* Dec Dig. (Key-So.) | 8; Cent. Dig. ^ 8. 



166 ' CONSIDERATION (Ch. 5 

ly approved.** It has, however, met with criticism on the ground 
that the debtor, being a stranger to the consideration, cannot 
enforce such a contract*^ Sir William Anson finds consideration 
moving from the debtor in his procurement of the promise by the 
other creditors to forbear.** On one ground or another such 
agreements are universally sustained.** 



SAME— IMPOSSIBILITY AND VAGUENESS 

77. IMPOSSIBLE PROMISE. A promise to do something which 

is either impossible in law, br physically impossible, is no 
consideration. The thing must be impossible on its face ; 
not merely improbable, or impossible to the promisor. 

78. VAGUE PROMISE. A promise which is so vague and indefi- 

nite as to be incapable of enforcement is no consideration. 

Impossible Promise 

The courts will also hold a consideration unreal, and therefore no 
consideration at all, where it is impossible upon its face. As will 
presently be seen, practical impossibility, unknown to the parties 
when they entered into their contract, may avoid it on the ground 
of mistake;** or impossibility of performance, arising subsequent 
to the making of the contract, may, under some circumstances, 
operate as a discharge;*^ but we are here concerned with prom- 
ises to do a thing so obviously impossible that the promise can 
form no real consideration. 

The consideration may be either (1) impossible in law, or (2) 
physically impossible. Where, for instance, a debtor made a prom- 
ise to the servant of his creditor in consideration of a promise by 
the servant to release him from the debt, it was held that there was 

*«Wmiaiii8 T. Carrlngton, 1 Hilt (N. Y.) 615; Perkins v. Lockwood, 100 
Mass. 249, 1 Am. Rep. 103 ; Brown v. Famham, 48 Minn. 817, 51 N. W. 877. 
See, also. White ▼. Kuntz, 107 N. Y. 518, 14 N. E. 423, 1 Am. St Rep. 880. See 
**CompoHtion8 toith CreditorM,** Dec, Dig, (Key-No.) | 8; Cent. Dig. { 8. 

4T See Huffcutt, Anson, Ck)nt 108^ note 1 ; Harriman, Cont S 126. 

«» Anson, Cont (8th Ed.) 90. 

*• Fellows V. Stevens, 24 Wend. (N. Y.) 294; Murray v. Snow, 37 Iowa, 410; 
Cheveront v. Textor, 53 Md. 295, 307; Falconbury ▼. Kendall, 76 Ind. 260; 
Robert ▼. Bamum, 80 Ky. 28; Pierce v. Jones, 8 Rich, (8 S. C.) 273, 28 Am. 
Rep. 288 ; Paddleford v. Thacher, 48 Vt 574 ; Boyd ▼. Hind, 1 HurL & N. 
938; Slater y. Jones, L. R. 8 Exch. 193; Stewart ▼. Langston, 108 Ga. 290, 80 
S. E. 85. Bee **Compo9ition$ with Creditors;* Deo. Dig, {Key-No.) i 8; Cent. 
Dig. § 8. 

*o Post, p. 251. •* Post p. 590. 



§§ 77-78) DfPossiBiUTr and vagueness , 167 

no consideration for the debtor's promise, as the servant hart no 
power to release the debt.** So, also, an undertaking that another's 
land shall sell for a given sum on a certain day has been held insuffi- 
cient to support a promise, on the ground that a person cannot com- 
pel the sale of another's property.** In these cases the considera- 
tion is impossible in law. A promise to go from New York to Lon- 
don in a day would be physically impossible, and could form no 
consideration for a promise given in return.** 

Impossibility, as used in this connection, does not mean anything 
more than a prima facie legal impossibility or physical impossibility 
"according to the state of knowledge of the day." ** In the first 
case of legal impossibility mentioned above, the promisor might 
procure the release of the debt; and, in the second case, he might 
procure the owner of the land to sell it by the time specified. There 
is, however, a pVima facie ixppossibility, and this is enough. So it 
may be that, in the future, means may be discovered by which one 
may be able to travel from New York to London in a day ; but, ac- 
cording to the present state of knowledge, it is physically impossi- 
ble. It was said in a New York case that if the promise be "with- 
in the range of possibility, however absurd or improbable the idea 
of the execution of it may be, it will be upheld ; as where one cove- 
nants it shall rain to-morrow, or that the pope shall be at Westmin- 
ster on a certain day. To bring the case withiti the rule of dispen- 
sation, it must appear that the thing to be done cannot by any 
means be accomplished ; for if it is only improbable, or out of the 
power of the obligor, it is not in law deemed impossible." ** 

■tHarrey t. Gibbons, 2 Ley. lei. And see Ward t. Holllns, 14 Md. 158: 
Pierce ▼. Pierce, 17 Ind. App. 107, 46 N. B. 480. Bee "Contracts,'* Dec Dig. 
iKey-No.) t 80; Cent. Dig. |t S82-S81, S95. 

»• Sterens v. CJoon, 1 Pin. (Wis.) 35a Bee **Coniraots,** Dec. Dig. (JTey-^o.) 
t SO; Cent. Dig. U S8Z-^7, S95. 

i« See James ▼• Morgan, 1 Lev. Ill ; Tbomborow t. Whiteacre, 2 Ld. 
Raym. 1164 ; Bennett ▼. Morse, 6 Ck>lo. App. 122, 39 Pac. 582. A covenant by 
an applicant for life insurance tliat he wlU not die by his own hand while in- 
sane does not create a contract which will defeat recovery on the policy 
where the insured takes his life while insane, since the covenant was one 
impossible to observe, and known to be so by both parties. Kelley v. Insur- 
ance Co. (G. 0.) 109 Fed. 56. Bee "Contracts,'* Deo. Dig. (Key-No.) | 80; Cent. 
Dig. WS&^87, S95. 

•1 Per Brett, J., CUfford t. Watts, L. R. 5 O. P. 577, 58a Bee "ConiracU," 
Dee. Dig. (Key-No.) | 80; Cent. Dig. $| S8^^87, S95. 

■• Beebe t. Johnson, 19 Wend. (N. Y.) 500, 82 Am. Dee. 518, citing 3 Com. 
Dig. 93; 1 Rolle, Abr. 419. And see Watson v. Blossom, 50 Hun, 600, 4 N. Y. 
Supp. 489; Clifford v. Watts, L. R. 5 C. P. 588; The Harriman T. Emerick, 9 
WalL 161, 19 L. Ed. 629. Bee "ContracU," Dee. Dig. (Key-No.) | 80; Cent. 
Dig. K S82S87, S95. 



168 dbNSIDBRATIOM ' (Ch. 5 

Vague Promise 

Again, a consideration may be unreal because it is so vague in its 
terms as to be practically incapable of enforcement. In such case it 
may be classed with impossible considerations. Where, for in- 
stance, in an action on a note given by a son to his father the son 
pleaded a promise made by his father to discharge him from liabil- 
ity on the note in consideration of his ceasing to make certain com- 
plaints, which he had been in the habit of making, to the effect that 
he had not enjoyed as many advantages as the other children, it 
was said that the son's promise was no more than a promise ''not 
to bore his father," and it was held too vague to constitute a con- 
sideration for the fiather's promise. "A man," said the court, "might 
complain that another person used the highway more than he ought 
to do, and that other might say, 'Do not complain, and I will give 
you £5.' It is ridiculous to suppose «that such promises could be 
binding." *^ So a contract by which a person promised to erect "a 
permanent and first-class hotel for the accommodation of the travel- 
ing public, and maintain the same in a first class manner," in con- 
sideration of the promise of a railroad company that it, "by the 
patronage of its road, would support and maintain the same," has 
been held void, because the stipulations were too vague and indefi- 
nite." 

We have already sufficiently discussed the question of vagueness 
and uncertainty in agreements.'* 

LEGALITY OP CONSIDERATION 

79. The consideration, to support a promise, must be legal; and 
therefore a promise to do or doing what is illegal is no 
consideration.** 

It is well to state this rule here, as indicating a necessary element* 
in consideration. It will be treated when we come to consider, as 
an element in the formation of contract, the legality of the objects 
for which the parties to a contract enter into it. 

' »T White ▼. Bluett, 23 Law J. Exch. 36, 2 Com. Law Rep. 301. And see Bal- 
lou ▼. March, 133 Pa. 64, 19 Atl. 304. See **Contract9," Dec Dig. (Key-No.) | 
9; Cent, Dig. H 10-20. 

*• HART V. RAILROAD CO., 101 Ga. 188, 28 S. E. 637, Throckmorton Cas. 
Contracts, 126. See "Contracts,'' Dec. Dig. {Kev-No.) 19; Cent. Dig. S§ 10-tO. 

•• Ante, p. ■ 64. 

•0 BISHOP T. PALMER, 146 Mass. 469, 16 N. E. 299, 4 Am. St Rep. 339, 
Throckmorton Cas. Contracts, 290; Hatch y. Mann, 15 Wend. (N. Y.) 45; 
Hartley t. Rice, 10 East, 22. See post, p. 814 et seq. See **Contract9,*' Dec. 
Dig. (KeV'Vo.) t lOS; Cent. Dig. %% 468-47^. 



i 80) GONSIDEKATION IN BESPEGT OF TIMB 169 

CONSIDERATION IN RESPECT OF TIME— PAST CON- 
SIDERATION 

80. A consideration may be executory or executed, but it cannot 
be past, except — 

EXCEPTIONS '^^— (a) Where the past consideration was given 
at the request of the promisor, 

(b) Where the promise is to pay for something voluntarily 

done by the promisee^ which the promisor was legally 
bound to do. 

(c) Where a person, by a new promise, revives an agreement 

by which he has benefited, but which is not void, but 
voidable or unenforceable against him, by reason of a 
rule of law, meant for his advantage, which he pay 
waive. 

Executory Consideration 

The consideration for a promise is executory when it is a promise 
given in return to do something in the future. In regard to this, 
there is nothing to be added to what has already been said with re- 
gard to the nature of consideration in general. We have seen that 
a promise on one side is a good consideration for a promise on the 
other. 

Executed Consideration 

A contract arises upon an executed consideration when one of the 
parties has either in the act which amounts to a proposal or to an 
acceptance, as the case may be, done all that he is bound to do un- 
der the contract, leaving an outstanding liability on the other side 
only. The two forms of consideration thus suggested have been 
described as (1) acceptance of an executed consideration, and (2) 
consideration executed upon request.** They arise when the pro- 
posal is an offer of an act for a promise, and the act is accepted; 
or where it is an offer of a promise for an act, and the act is done. 

In the first case a man offers his labor or goods under such cir- 
cumstances that he obviously expects to be paid for them, and the 
contract arises when the labor or goods are accepted, the acceptor 
becoming bound to pay a reasonable price for them.*' The con- 
sideration executed upon request, or the contract which arises on 

•i The first two exceptions are doubtful, post, pp. 171-173. 
«s I^eake. Cont 23. 

••Ante, p. 19; Hoadley t. McLalne, 10 Blue. 482: Hart v. Mills, 15 Mees. 
ft W. 87. Bee ''Contracts,'* Dec. Dig. (Kei/-xVo.) U 76, 79; Cent. Dig. U SS^ 

S81. 



^ 



170 . CONSIDERATION (Ch. S 

the acceptance by act of the offer of a promise, is best illustrated 
by the case of an advertisement of a reward for services, which 
makes a binding promise to give the reward when the service is 
rendered. Under these circumstances, it is not the offeror, but the 
acceptor, who has done his part in becoming a party to the con- 
tract.** This form of consideration will support an implied as well 
ds an express promise where a man is asked to perform certain 
services which will entail certain liabilities and expenses. Thus, 
where a person is employed to deal with property for a certain pur- 
pose, and, in the course of the employment, he is compelled to pay 
duties to the government, he may recover the amount from his em- 
ployer on au implied promise to repay.** 

Past Considefotion 

Strictly, it is a misnomer to speak of a past "consideration," for 
it is in fact no consideration at all. A past consideration, so called, 
is some act or forbearance in time past by which a man has benefit- 
ed without thereby incurring any legal liability.- If, afterwards, 
whether from good feeling or interested motives it matters not, he 
makes a promise to the person by whom he has been so benefited, 
and that promise is made upon no other consideration than the past 
benefit, the promise is gratuitous, and cannot be enforced.** Thus, 
where a person who had previously sold a vicious horse without 
any warranty, either express or implied, afterwards promised that 
it was sound and free from vice, it was held that the promise was 
not binding for want of consideration.*^ So, also, it has repeated- 
ly been held that services rendered in the past, but not at the ex- 

•«Ante, pp. 47, 48; England T. DavldBon, 11 AdoL & El. 850. Bee ^'Coi^ 
trade,** Dec. Dig. {Key-No.) §| 7^, 19; Vent. Dig. %i SoJt^Sl. 

•s '* Whether the request be direct, as where the party is expressly desired 
by the defendant to pay, or indirect, where he is placed by him nnder a lia- 
bility to pay, and does pay, makes no difference.'* Brittain t. Lloyd, 14 
Mees. & W. 762. Bee **ContractM/' Dee. Dig. (Key-No,) | 78; Cent. Dig. |S SSJh 
S56. 

••MOORB y. ELMER, 180 Mass. 15, 61 N. E. 259, Throckmorton Cas. Con- 
tracts, 128; Hunt v. Bate (1568) Dyer, 272; Bulkley y. Landon, 2 Conn. 404; 
Bartholomew t. Jackson, 20 Johns. (N. Y.) 28, 11 Am. Dec. 2371 Chaffee ▼. 
Thomas, 7 Cow. (N. T.) 858; Greene y. First Parish in Maiden, 10 Pick. 
(Mass.) 500; WiUiams y. Hathaway, 19 Pick. (Mass.) 387; Wilson t. Edmonds, 
24 N. H. 517 ; Marsh y. Chown, 104 Iowa, 556, 73 N. W. 1046 ; Stonebumer t. 
Motley, 95 Va. 784, 80 S. E. 364. Some of the earlier cases sustained, and 
many late cases seem to sustain, promises on a past consideration on the 
ground of moral obligation. Barnes y. Hedley, 2 Taunt 184 ; Lee y. Mugger- 
idge, 5 Taunt 86. See ante, p. 136; post, p. 175. Bee **ContractSf** Dec. Dig. 
(Key-No.) i 19; Cent. Dig. §§ SST-SSl. 

•T Roscorla y. Thomas, 8 Q. B. 234. Bee ^^Contracte,** Dee. Dig. {Key-No.) I 
79; Cent. Dig. t§ 557-^i. 



S 80) CONSIDERATION IN BBSPEOT OF TIMB 171 

press or implied request of the person 'benefited by them, will not 
support a promise hy him to pay for.them.** In a Michigan case in 
which liquor had been sold in violation of a statute, which was aft- 
erwards repealed, the court held that, as the contract was void, a 
promise by the buyer to pay, made after the statute was repealed, 
in consideration of the sale and of an extension of the time for pay- 
ment originally agreed upon, was without consideration.'* So, 
where the balance of a debt has been voluntarily and effectually 
released on payment of a part of it, a subsequent promise by the 
debtor to pay the part released cannot be enforced.^* 

Exceptions to the Rule as to Past Consideration 

(1) It is generally declared a past consideration will support a 
subsequent promise if the consideration was given at the request 
of the promisor. In Lampleigh v. Braithwait the plaintiff sued for 
money which the defendant had promised to pay him for services 
rendered previous to the promise, at the defendant's request, but 
without any promise at the time of the request and of the rendi- 
tion of the services. The court agreed "that a mere voluntary 
courtesy will not have consideration to uphold an assuinpsit. But, 
if that courtesy were moved by a suit or request of the party that 
gives the assumpsit, it will bind; for the promise, though it fol- 
lows, yet it is not naked, but couples itself with the suit before, and 
the merits of the party, procured by that suit" ^* On principle, it 

• 

•• MlUs T. Wyman, 8 Pick. (Massi) 207; Bartbolomew t. Jackson, 20 Johna 
(N. T.) 28, 11 Am. Dec. 237 ; Dearborn ▼. Bowman, 3 Meta (Mass.) 155 ; AUen 
y. Bryson, 67 Iowa, 591, 25 N. W. 820, 56 Am. Rep. 858; Osier ▼. Hobbs, 83 
Ark. 215; EUlcott v. Turner, 4 Md. 476. Bee **Contraot9," Deo. Dig. (Key-No.) 
i 19': Cent. Dig. SI S57-381. 

•• Ludlow ▼. Hardy, 88 Mich. 690. Bee **Contraet9,^ Dec Dig. (Key-No,) i 
79; Cent. Dig. U 857-^81. 

70 Hale T. Rice, 124 Mass. 299; Mason t. Campbell, 27 Minn. 54, 6 N. W. 
405 ; Montgomery y. Lampton, 8 Meta (Ky.) 519 ; Staepard y. Rhodes, 7 R. I. 
470, 84 Am. Dea 673 ; Stafford y. Bacon, 1 Hill (N. Y.) 532, 87 Am. Dec 36a 
But see Willing y. Peters, 12 Serg. & R. (Pa.) 177. Bee "Contracts,** Dec. Dig. 
(Key-No.) i 79; Cent. Dig. tS 957-881. 

Ti Lampleigh y. Braithwait (A. D. 1615) Hob. 106, 1 Smith, Lead. Cas. 67. 
And see Sidenham y. Worlington (1585) 2 Leon. 224; Marsh y. Rainsford 
(158^ 2 Leon. Ill ; Riggs y. Bullingham (1599) Gro. Eliz. 715 ; Bosden y. Sir 
John Thenne (1608) Yely. 40; Field y. Dale, 1 Rolle, Abr. 11; Boothe y. Fitz- 
patrick, 36 Vt 681; Chaffee y. Thomas, 7 Cow. (N. Y.) 858; Dearborn y. 
Bowman, 8 Mete. (Mass.) 155 ; Comstock y. Smith, 7 Johns. (N. Y.) 87 ; Allen 
y. Woodward, 22 N. H. 544 ; Goldsby y. Robertson, 1 Blackf . (Ind.) 247 ; Car- 
son y. Clark, 2 IlL (1 Scam.) 113, 25 Am. Dec. 79 ; Lonsdale y. Brown, 4 Wash. 
a O. 14Q, Fed. Ca& No. 8,494 ; Wilson y. Edmonds, 24 N. H. 517. The pre- 
yious request may be inferred from the beneficial character of the seryices, 
or other consideration, and the other dreumstances. Hicks y. Burhans, IC 
Jehns. (N. Y.) 243; Oatfleld y. Waring, 14 Johns. (N. Y.) 188; Wilson y. Ed- 



172 CONSIDERATION ' (Ch. 5 

. would seem that, unless the services were rendered under such cir- 
cumstances that the law would imply a promise to pay what they 
were worth, a subsequent promise would be without eflfect,'* and 
that in that case the only effect of the subsequent promise would 
be as evidence of the value of the services.^* In many of the cases^ 
indeed, in which the exception was recognized the subsequent 
jpromise was coextensive with that which would have been implied 
by law. And in view of the repudiation of the doctrine of past con- 
sideration, the exception is discredited by modern text-writers.'* 
Lampleigh v. Braithwait has, however, been followed in several 
recent cases in this country."'* 

Some cases even go so far as to say that even though the past 
consideration was rendered without request, yet, if it moved directly 
from the promisee to the promisor, and inured directly to the prom- 
isor's benefit, the subsequent promise is binding; '• but these cases 
are doubtful, unless they can be sustained on the ground that the 
ratification of an unauthorized act is equivalent to a. request.'^ It 
has been held that if the past consideration, though rendered at the 
request of the other party, was intended by both parties to be gra- 
tuitous, the subsequent promise to pay therefor is not supported by 
a consideration.'* 

(2) There is another exception, or possible exception, to 'the rule 

monds, 24 N. H. 517. Tbe rale laid down in Lampleigh v. Braithwait was 
literally kdhered to in Ireland in a comparatively late case. Bradford v. 
Roulston, 8 Ir. O. L. 468. See **Contraot8,** Dec, Dig. (Key-No.) | 79; Cent. 

Dig. IS ssy-sai. 

71 MOORS T. ELMER, 180 Mass. 15, 61 N. E. 250, Throckmorton Gas. Con- 
tract9»- 128, in which it is said, per Holmes, G. J. : "The modem authorltiea 
which speak of services rendered upon reqiiest as supporting a promise must 
be confined to cases where the request implies an undertaking to pay.'* Bee 
"OontraeU,** Deo. Dig. (Key-No.) { 79; Cent. Dig. f§ 357-361. 

71 See Kennedy v. Brown, 18 G. B. N. S. 677, per Earle, G. J. See **Cor^ 
tracts;* Dec. Dig. (Key-No.) | 79; Cent. Dig. S§ 357-381. 

74 Anson, Cont (8th Ed.) 98-100; PoUock, Gont (3d Ed.) 187; Harriman^ 
Ck>nt § 139. 

7B Pool V. Homer, 64 Md. 131. 20 Atl. 1036; Stuht v. Sweesy, 48 Neb.^767, 
67 N. W. 748; SUverthora v. Wylle, 96 Wis. 69, 71 N. W. 107; Montgomery 
V. Downey, 116 Iowa, 632, 88 N. W. 810. See, also, Daily v. Minninck, 117 
Iowa, 563, 91 N. W. 913, 60 L. B. A. 840. See "Contracts^* Deo. Dig. (Key-No.) 
i 79; Cent. Dig. U 357-381. 

7« Boothe V. Fitzpatrick, 36 Vt 681 ; Seymour v. Town of Marlboro, 40 Vt 
171; Doty v. Wilson. 14 Johns. (N. T.) 37& See "Contacts;* Deo. Dig. (Key- 
No.) I 79; Cent. Dig. H 357-381. 

77 Post, p. 173, note 83. 

71 Allen v. Bryson, 67 Iowa, 591, 25 N. W. 820, 56 Am. Rep. 358; Osier v. 
Hobbs, 83 Ark. 215. See '^Contracts;* Dee. Dig. (Key-No.) | 79; Cent. Dig. 
H 357-S81. 



§ 80) CONSIDERATION IK RESPECT OF TIME 173 

in cases where one person has voluntarily done what another per- 
son was legally bound to do, and the latter afterwards promises to ^ 
pay him therefor. The English cases usually cited in support of 
this rule all turned upon the liability of parish authorities for med- 
ical attendance upon paupers who were settled in one parish, but 
resident in another. It was held in all the cases that a suit could be 
maintained for services rendered against the parish legally bound 
to render them, which had, after their rendition, promised to pay 
for them. Some of the cases seem to base the decision on the 
ground that the moral obligation resting on the parish was suffi- 
cient to support its promise ; ^* but, as we have seen, moral obliga- 
tions cannot form a consideration.** Other cases seem to go on the 
ground that there was a legal obligation resting on the parish of 
residence to do that which the parish of settlement might legally 
have been compelled to do, and that a quasi contractual relation 
thus arose between the parties; or that there was knowledge on 
•the part of the defendant parish of acts from which a contract 
might be implied, independent of the subsequent promise.*^ There 
is, to say the least, much doubt in regard to this exception.** In a 
Massachusetts case, however, in which the plaintiif had, without a 
prior request, paid money which the defendant was legally bound 
to pay, the court held that a subsequent promise by the defendant 
to reimburse him was "equivalent to a previous request," on "the 
well-established principle that the subsequent ratification of an act 
done by a voluntary agent, of another, without authority from him, 
is equivalent to a previous authority." ** 

(3) The third exception, or apparent exception, to the rule that a 
past consideration will not support a promise is a substantial and 
important one, and one about which there is no doubt. It is found 
in those cases in which a person has been held capable of reviving an 
agreement by which he has benefited, but which, by reason of some 
rule of law meant for his advantage, which he may waive, is not 
enforceable against him. The principle upon which these cases rest 

T» Watson T. Turner, Bull. N. P. 147; Atkins ▼. Ban well, 2 East, 505; 
Wing ▼. Mill. 1 Barn. & Aid. 105. See ''Contracts," Deo. Dig. (Key-No.) S 79; 
Cent Dig. SI 857-981; **PauperM,'* Deo. Dig. (Key-No.) ^ U; Cent. Dig. ff 196- 
197. 

so Ante, p. 136; Mills y. Wyman, 8 Pick. (Mass.) 207. See ^'Contracts," 
Dec. Dig. (Key-No.) $ 76; Cent. Dig. §§ 357-^81; "Paupers," Dec. Dig. iKey- 
Vo.) S U; Cent. Dig. S§ 195-197. 

•1 Paynter v. Williams, 1 Gromp. & M. 810. See "Paupers," Deo. Dig. 
(fey-No.) I U; Cent. Dig. %% 195-197. 

•s Anson, Oont (8th Ed.) 100-102. 

s» QleaBon t. Dyke, 22 Pick. (Mass.) 390. And see Doty ▼. Wilson, 14 Johns. 
<N. T.) SSa 060 **ContraoU," Dec Dig. (Key-No.) { 79; Cent. Dig. H 857-^81. 



174 CONSIDERATION (Ch 5 

is "that, where the consideration was originally beneficial to the 
# party promising, yet, if he be protected from liability by some pro- 
vision of the statute or common law, meant for his advantage, he 
may renounce the benefit of that law, and if he promises to pay the 
debt, which is only what an honest man ought to do, he is then 
bound by the law to perform it." •* Thus a new promise made by 
a bankrupt or insolvent who has been discharged from debts by a 
certificate of bankruptcy, or by insolvency proceedings, to pay a 
debt, has been upheld without further consideration.** So a prom- 
ise by a person, after becoming of age, to pay debts contracted dur- 
ing infancy, and which could not be enforced, is binding on him.** 
Some courts have held that a promise by a woman during widow- 
hood or after divorce, to fulfill promises made during coverture, is 
binding;*^ but most courts hold that as a married woman's con- 
tract, unlike an infant's, is void, and not merely voidable, her new 
promise after the death of her husband; or after a divorce has been 

8* Parke, B., In Earle ▼. Oliver, 2 Exch. 71; Shepard v. Rhodes, 7 R. I. 
470, 84 Am. Dec 673; Turlington ▼. Slaughter, 54 Ala. 105; Lonsdale t. 
Brown, 4 Wash. C O. 80, Fed. Cas. No. 8,403. Promise by the owner of a 
building to pay for materials furnished by a contractor who has faUed to 
comply with the mechanic's lien law.' Morse v. Crate, 43 111. App. 513. See 
^^Contracta,** Dee. Dig. (Key-No.) i 79; Cerit. Dig. %% S57-S81. 

••Trueman v. Fenton, Cowp. 544; DUSENBURY ▼. HOYT, 53 N. Y. 521, 
13 Am. Rep. 543, Throckmorton Cas. Contracts, 120; Way v. Sperry, 6 Cush. 
(Mass.) 238, 52 Am. Dec. 770; Shlppey v. Henderson^ 14 Johns. (N. Y.) 178. 7 
Am. Dec. 458; Yates* Adm'rs v. Hollingsworth, 5 Bar. &'J. (Md.) 210; Katz 
y. Moessinger, 110 111. 372; Shaw y. Burney, 80 N. C. 331, 41 Am. Rep. 401; 
Wislizenus y. G'Fallon, 01 Mo. 184, 3 S. W. 837 ; Wolffe y. Eberleln, 74 Ala. 
00, 40 Am. Rep. 800; Carey y. Hess, 112 Ind. 308, 14 N. E. 235; Knapp y. 
Hoyt, 57 Iowa, 501, 10 N. W. 025, 42 Am. Rep. 50; Griel y. Solomon, 82 Ala. 
85, 2 South. 322, 00 Am. Rep. 733; Hobough y. Murphy,. 114 Pa. 358, 7 Atl. 
130; Murphy y. Crawford, 114 Pa. 400, 7 Atl. 142; Craig v. Seitz, 03 Mich. 
727, 30 N. W. 347; Succession of Audrien, 44 La. Ann. 103, 10 South. 3SS; 
Christie y. Bridgman, 51 N. J. Eq. 331, 25 Atl. 030, 80 Atl. 420; Higglns y. 
Dale, 28 Minn. 120, N. W. 583. But not if debt is yoluntarlly released. 
Stafford y. Bacon, 1 HHl (N. Y.) 532, 37 Am. Dec 300. See ante, p. 103. 
Promise by third person to pay discharged debt Webster y. Le Compte, 74 
Md. 240, 22 Att. 232. Bee ** Bankruptcy,'* Deo. Dig. {Key-No.) i 4S4; Cent. 
Dig. §f 85S-S66; '^Contracts,** Cent. Dig. § S61. 

«« Williams y. Moor, 11 Mees. & W. 203; Tibbetts v. Gerrish, 25 N. H. 41, 
57 Am. Dec. 307; Bliss y. Perryman, 1 Scam. (111.) 484; Reed y. Batchelder, 
1 Mete. (Mass.) 550; Kendrick y. Neisz, 17 Colo. 500, 80 Pac. 245; Heady y. 
Boden, 4 Ind. App. 475, 30 N. E. 1110; Edmond's Case (1580) 3 Leon. 104. 
Bee **Infants,'* Deo. Dig. (Key-No,) § 57; Cent. Dig. || ISO^HS, 157; *'Conr 
tracts," Cent. Dig. ^ S67. 

•7 Lee-y. Muggeridge, 5 Taunt. 30 (this was on the ground of moral obliga- 
tion); Brown y. Bennett, 75 Pa. 420; Sharpless' Appeal, 140 Pa. 03, 21 Atl. 
230; Gouldlng y. Davidson, 20 N. Y. 004. Bee "Hushand and Wife," Deo. Dig. 

(Key-No.) § 89; Cent. Dig. S§ 958-961; ^'ContraotM," Cent. Dig. U S65, SG6. 

i 



I 



§ 80) OONSID8BATION IN BESPEOT OF TIMB 175 

obtained, is without consideration/* So, also, a debt barred by the 
statute of limitations may be revived by a new promise to pay it, 
and the new promise may be implied from a mere acknowledgment 
of the debt.** And an indorser on a note, who has been discharged 
from liability from want of notice of nonpayment, may waive his 
discharge.** It has even been held, where bills, void for usury, 
were renewed after the usi^ry laws had been repealed, the consider- 
ation for the renewal being the past loan, that the new bills were 
valid.** 

There is undoubtedly in all of these cases a moral obligation to 
fulfill the unenforceable promise, and many of the decisions, both 
old and modern, base the validity of the new promise on the ground 
of the moral obligation, thereby making this class of. cases an ex- 
ception to the rule that a moral obligation cannot support a prom- 
ise.** If the effect of t;hese cases is to make such an exception, it 

ss HayKurd ▼. Barker, 62 Vt 42D, S6 Am. Rep. 762; Porterfleld ▼. Butler, 
47 Miss. 165, 12 Am. Rep. 829; Meyer t. Howarth, 8 Adol. & El. 4^7; Raters 
y. Bean, 15 Ga. 858; Putnam t. Tennyson, 50 Ind. 456; Mustek y. Dodson, 76 
Mo. 624, 43 Am. Rep. 780; Kent y. Rand, 64 N. H. 45, 5 Atl. 760; Valentine 
y. Bell, 66 Vt 280, 29 Aa 251 ; Wilcox y. Arnold, 116 N. C. 708, 21 S. B. 484 ; 
Thompson y. Hudglns, 116 Ala. 93, 22 South. 632; Holloway's Assignee y. 
Rudy (Ky.) 60 S. W. 650. A promise by a married woman, haying a separate 
estate, to pay for necessaries furnished her on the credit of such estate. Is a 
sufBdent consideration for a new promise after the death of her husband. 
Sherwln y. Sanders, 69 Vt 499, 9 AtL 239, 59 Am. Rep. 750. Bee '^Huiband 
and Wife," Dee. Dig. {Key-No.) | 89; Cent. Dig. || $58^61; *'ContracU,*' 
Cent Dig. U 365, $66. 

•• nsley y. Jewett, 8 Mete. (Mass.) 439; Keener ▼. Grull, 19 I1L 189; Walker 
y. Henry, 86 W. Va« 100, 14 S. B. 440; UtUe y. Blunt, 9 Pick. (Mass.) 488; 
Plttman y. Blder, 76 Oa. 871; Pierce y. Wlmberly, 78 Tex. 187, 14 S. W. 454; 
Hall y. Bryan, 50 Md. 194 ; Perkins y. Cheney, 114 Mich. 567, 72 N. W. 595, 
68 Am. St Rep. 495. But a deceased person's debt which Is barred will not 
support his widow's promise to pay It Sulllyan y. Sulllyan, 99 GaL 187, 83 
Pac. 862L Bee •*I4mitati<m of Actione,** Dee. Dig. iKey'No:^ | H5; OmU. Dig. 
t692. 

•• Ross ▼. Hurd, 71 N. Y. 14, 27 Am. Rep. 1; GUdden y. C^iamberlln, 167 
Mass. 486, 46 N. E. 103, 57 Am. St Rep. 479. Bee **BiU8 and Notes,"* Deo. Dig. 
{Key-No.) §| it2, 423; Cent. Dig. || 1196-1222. 

•iFlU^t y. Reed, 1 Hurl. & G. 703; Hammond y. Hopping, 13 Wend. (N. 
T.) 605. See Barnes y. Hedley, 2 Taunt 184. But see Ludlow y. Hardy, 38 
Bflch. 690; ante, p. 136; and dissenting opinion of Martin, B., In Flight ▼. 
Reed, supra. Bee "BiUt and Notes,'* Dee. Dig. (Key-No.) i 139; Cent. Dig. 
I 354; '^Usury,'* Dec Dig. (Key-No.) t 67; Cent. Dig. |S HO, 141; '^Contracts," 
Cent. Dig. | 379. 

•s Edmond's C^se (1586) 8 Leon. 164 ; WlsUzenus ▼. 0*Fallon, 91 Mo. 184, 
8 S. W. 837 ; Turlington y. Slaughter, 54 Ala. 195 ; Muslck y. Dodson, 76 Mo. 
624, 48 Am. Rep. 780; Garey y. Hess, 312 Ind. 898, 14 N. E. 235; Hobough 
y. Murphy, 114 Pa. 358, 7 AtL 139; Murphy y. Grawford, 114 Pa. 496, 7 Ati. 
142; Gralg ▼• Seltz, 63 Mich. 727, 80 N. W. 847; Succession of Audrleu, 4< 



176 CONSIDERATION (Ch. 6 

IS unfortunate, to say the least, for there is much dicta to the effect 
that a moral obligatiori can never support a promise.*" It would 
§eem much better to base the validity of such promises, not on the 
moral obligation, but on the prior agreement, supported by a valua- 
ble consideration, and the right of the promisor to waive the techni- 
cal rules of law, meant for his benefit, and which render it unen- 
forceable. 

f 

La. Ann. 103, 10 South. 888w See post, p. 87(5. Bee **C(mtra€t9,** Dec. Dig. 
{Key-Vo.) i 19; Oent, Dig, fi S57-S81. 

•s Mills T. Wyman, 3 Pick. (Mass.) 207. And see ante, p. 130 et seq., and 
eases cited. Bee *'C(mtraci9,** Dec. Dig, (Key-Nc.) | 79; Oent. Dig. H S57S8U 



CAPACITY OF PARTIB8 ITT 



CHAPTER VI 

CAPAClTlt OF PARTipa. 

8L In GeneraL 

Political SUtus— States and United Statea^ 
84. Foreign States and SoTexelsna. 

85-^88. Aliens. 

80. Convicts. 

90. Professional Statua 

91-84. Infants — In General. 
95-97. Liability for Necessaries. 

98. Ratification and AToidanoa 

99^101. Who may Aroid Contract 

102-104. Time of Avoidance. 

105-107. What Amounts to Ratification. 

108. What Amounts to Disafiirmance. 

109. Extent of Ratification or Disafiirmance. 
IIO-IIL Return of Consideration. 

112-114. Effect of Ratification and Disaffirmance. 

115-116. Torts in Connection with Contracts. 

117. Insane Persons — In General. 
118-121. Ratification and Avoidance. 

122-123. Drunken Persons. 

124. Married Women. 

125-128w Corporations. 

• 
Thus far we have been dealing with the contract itself, and those 

elements in its formation which are essential to give it even a 
prima facie validity. Communication by offer and acceptance, and 
form or consideration, or, in some cases, both form and considera- 
tion, are necessary to every agreement that is to be considered by 
courts of law ; but this is not all. When we have constructed an 
apparently binding contract, it is necessary, before we can pro- 
nounce finally upon its validity, to look to the parties to it, and ask 
who made it, under what circumstances, and with what object. In 
other words, we have to inquire whether the parties were capable 
of contracting, whether their apparent consent was genuine, and 
whether thefr object was legal.^ In this chapter we shall consider 
the question of the capacity of the parties, 

i See Anson, Gont (4th Ed.) 102L 
Clark Cont.(3d Ed.) — 12 



178 CAPACITZ OF PARTIES (Ch. 6 



IN GENERAL 

81. Incapacity to contract may arise from the following causes: . 

(a) Political status. ,In this connection we will consider con- 

tracts by 

(1) The United States or state governments; 

(2) Foreign sovereigns or states^ and their representatives ; 

(3) Aliens; 

(4) Convicts. 

(b) Professional status, as in the case of professional contracts 

by 

(1) Attorneys; 

(2) Physicians; and 

(3) In some jurisdictions, other professional persons. 

(c) Youth, as in the case of infants. 

(d) Permanent or temporary mental aberration, as in the case of 

(1) Idiocy; 

(2) Insanity; 

. (3) Drunkenness. 

(e) Merger of capacity, as in case of married women. 

(f) Artificiality of construction, as in the case of corporations. 



POLITICAL STATUS— STATES AND UNITED STATES 

82. The United States and the states may enter into contracts 

through their authorized agents, but only in furtherance 
of the objects of government, and subject to the limita- 
tions of the constitution. 

83. They may sue on their contracts, but cannot be sued unless 

they submit thereto. This, however, they have very gen- 
erally done by statutory or constitutional provisions. 

Th^s power of the United States government and the government 
of a state to enter into contracts in furtherance of objects for which 
the government was established, and not prohibited by constitu- 
tional limitations, is an incident to the general right of sovereign- 
ty. Tht question arose in the supreme court of the United States 
in a case in which it was held that a voluntary bond, taken by au- 
thority ot the proper ofHcers of the treasury department intrusted 
with the disbursement of public moneys to secure the fidelity in 
pfficial duties of a receiver or disbursing agent, was a binding con- 
tract betw;sen him and his sureties and the United States, though 



S§ 82-83) STATES AND UNITED SrATES 179 

the bond was not prescribed by any positive law. "Upon full con- 
sideration of this subject," said the court, "we are of opinion that 
the United States have such capacity to enter into contracts. It 
is, in our opinion, an incident to the general right of sovereignty ; 
and, the United States being a body politic, may, within the sphere 
of the political powers confided to it, and through the instrumental- 
ity of the proper department, to which those powers are confided, 
enter into contracts not prohibited by law, and appropriate to the 
proper exercise of those powers. ♦ ♦ ♦ To adopt a different 
principle would be to deny the ordinary rights of sovereignty, not 
merely to the general government, but even to the state govern- 
ments within the proper sphere of their own powers, unless brought 
into operation by express legislation. A doctrine to such an ex- 
tent is not known to this court as ever having been sanctioned by 
any judicial tribunal." ' The same doctrine applies to contracts 
by the state government.* 

A contract, however, to bind the government, must be made by 
its authorized agent, and parties dealing with its agent must see at 
their peril that the agent has actual authority.^ Likewise, it must 
be made in the form prescribed by statute, if any.* 

Where the government enters into a contract, whether a nego- 
tiable instrument or otherwise, which it has authority to make, it is 
bound in any court to whose jurisdiction it submits by the same 
principles that govern individuals in their relation to such con- 
tracts.* 

s United States t. Tlngeyf 6 Pet 116, 8 Lw Ed. 66L And see United States 
▼. Lane, 8 McLean, 865, Fed. Gas. No. 15,559. Bee "iStotet," Dec. Dig. {Key- 
yo.) II 90, 91; Cent. Dig. | 89; **United Statee," Dee. Dig. (KeyNo.) | 59; 
Cent. Dig, | 42. 

s Danolds v. State, 89 N. Y. 87, 42 Am. Rep. 277 ; Dikes t. MUler, 25 Tex. 
Snpp. 281, 78 Am. Dec 571. See **8tat€9;* Deo. Dig. {Key-No.) |i 90, 91; 
Cent. Dig. | S9. 

«The Floyd Acceptances, 7 Wall. 666, 19 L. Ed. 169; Whiteside t. United 
States, 93 U. 8.^247, 23 U Ed. 882. See Tiffany, Ag. 201. By an act of 
Congress [Act May 1, 1820, e. 52, | 6, 3 St at L. 668] no contract may be 
made by the secretary of state or treasury, or the department of war or navy, 
except under a statute authorizing it Fowler t. United States, 8 Gt CI. 43. 
See ^'United States," Deo. Dig. {Key-No.) § 60; Cent. Dig. | 43. 

s Contracts on behalf of the United States are required by yarious acts 
of Congress to be in writing and signed by the contracting parties, and such 
statutes luiTe been held mandatory, rendering yoid contracts not made in 
compliance therewith. Clark t. United States, 95 U. S. 539, 24 L. Ed. 518. 
And see Camp v. United St&tes, 113 U. S. 648, 5 Sup. Ct 687, 24 L. Ed. 1081. 
Spe '•United States,*" Deo. Dig. {Key-No.) S 65; Cent. Dig. | 48. 

• The Floyd Acceptances, supra ; Danolds y. State, supra ; Patton t. Gilmer, 
42 Ala. 548, 94 Am. Dec 665; United States ▼. Ingate (C. 0.) 48 Fed. 251. 
See ''United State*,*' Deo. Dig. {Key-No.) | 70; Cent. Dig. | 58. 



180 CAPACITY OP PARTIES (Ch. • 

At common law the sovereign cannot be sued without his con- 
sent, and this doctrine prevents suits against a state or against the 
United States, in the absence of permission by virtue of some statu- 
tory or constitutional provision/ Thus a bond or other contrac- 
tual obligation of 'H state may not be enforced by a private individ- 
ual," but under the provision of the federal constitution conferring 
upon the United States supreme court jurisdiction in controversies 
between states, it may be enforced by another state.* There are, 
however, in most of the states, provisions allowing suit in some 
form by individuals against the state; *® and the United States may 
be proceeded against in the court of claims,** and in some cases in 
the other federal courts.** A state or the United States has the 
same right as an individual to maintain an action on a contract 
made with it,** and it is the proper party to maintain such an action. 

T United States t. Clarke, 8 Pet 436, 8 L. Ed. 1001 ; l¥oy ft G. R. Co. v. 
Com., 127 Mass. 43; Ottawa County t. Aplin, 69 Mich. 1, 36 ^. W. 702; Presi- 
dent, etc., of Michigan State Bank y. Hammond, 1 Doug. (Mich.) G27 ; Same t. 
Hastings, 1 Doug. .(Mich.) 225, 41 Am. Dec. 549; Pattlson t. Shaw, 6 Ind. 377; 
Lowry ▼. Thompson, 25 S. C. 416, IS. E. 141; People t. Talmage, 6 Cal. 257; 
Taylor ▼. Hall, 71 Tex. 206, 9 S. W. 148; Galbes v. Girard (O. 0.) 46 Fed., 
500; Ferris v. Land Co., 94 Ala. 657, 10 South. 607, 33 Am. St Rep. 146. An 
action against a state or United States officer, which is in effect against the 
state or the United States, is within ihe rale. Ottawa County y. Aplin, 69 
Mich. 1, 36 N. W. 702; Taylor t. HaU, 71 Tex, 206, 9 S. W. 148; Aplin y. 
Board, 73 Mich. 182, 41 N. W. 223, 16 Am. St Rep. 576; Mills Pub. Co. v. 
lArrabee, 78 Iowa, 97, 42 N. W. 593 ; North Carolina t. Temple, 134 U. S. 22, 
10 Sup. Ct 509, 33 U Ed. 849; Brown University t. Rhode Island College 
(C: C.) 56 Fed. 55. See ^'United States;* Deo. Dig. (Key-No.) 1 125; Cent. Dig, 

H ns, 114. 

• Const U. S. Amend. 11 ; Hans t. Louisiana, 134 U. S. 1, 10 Sup. Ct 504, 
33 L. Ed. 842. See ''Statee^' Dec. Dig. (Key-No.) 1 191; Cent. Dig. || 179-184; 
^^Corporations,** Cent. Dig. 1 1910. 

• Const U. S. art 8, | % cL 1 ; South Dakota v. 'North Carolina, 192 U. S. 
286, 24 Sup. Ct 2G9, 48 L. Ed. 44a See **8tates;* Dec. Dig. (Key-No.) i 191; 
dent. Dig. |{ 119-184. 

10 Wesson t. Commonwealth, 144 Mass. 60, 10 N. B. 7ii2; Green v. State, 73 
CaL 29, 11 Pac 602, 14 Pac. 610 ; Hoagland v. State (Cal.) 22 Paa 142 ; Board 
of Education of Granrille County v. State Board, 106 N. C. 81, 10 S. E. 1002. 
See "States," Dec. Dig. (Key-No.) S 191; Cent Dig. i| 179-184. 

iiNichoU ▼. UnUed States, 7 Wall. 122, 19 U Ed. 125; Finn t. United 
States, 123 U. S. 227, 8 Sup. Ct 82, 31 L. Ed. 128; United States t. Cumming. 
130 U. S. 452, 9 Sup. Ct 583, 32 L. Ed. 1029. See **Courts;' Deo. Dig. (Key- 
No.) I 449; Cent. Dig. {§ 1163-1181. 

It Torrey v. United States (C. C.) 42 Fed. 207; Bo we v. United States, Id. 
761. See ^'Courts," Dec. Dig. (Key-No.) S S02; Cent. Dig. f{ 84S, 986. 

i« State T. Grant, 10 Minn. 39 (Gil. 22); State t. Burkeholder, 30 W. Va. 
593, 5 S. B. 439; People v. City of St Louis, 5 GUman (111.) 3j1, 48 Am. Dec. 
339; Spencer ▼. Brockway, 1 Ohio, 259, 13 Am. Dec. 615; United States v. 
Holmes (O. C.) 105 Fed. 41. -See "States,** Deo. Dig. (Key-No.) | 191; Cent. 



fi§ 85-88) ALIENS 181 



SAME— FOREIGN STATES AND SOVEREIGNS 

84. Foreign sovereigns and states and their representatives may 

make contracts and sue thereon in our courts, but they 
cannot be sued unless they submit. 

Foreign states and sovereigns and their representatives, and the 
officials and household of their representatives, are not subject to 
the jurisdiction of our courts unless they submit to it.** A con- 
tract, therefore, entered into with such persons, cannot be enforced 
against them unless they so choose, but it may be enforced by 
them.*» 

SAME— ALIENS 

85. An alien, not an alien enemy, has in most jurisdictions the 

some power to contract that a subject has, and may in 
like manner sue and be sued on hb contracts. In some 
jurisdictions he cannot acquire or hold land. 

86. ALIEN ENEMIES — ^An alien enemy cannot, as a rule, with- 

out leave of the government, make any contract with a 
subject, or enforce any existing contract, during the con- 
tinuance of hostilities. 

87. He may be sued on existing contracts, and in such a case he 

may defend. 

88. Pre-esasting contracts are not dissolved by the war unless they 

are of a continuing nature. 

An alien is said to be a person born out of the jurisdiction of the 
United States, subject to some foreign government, who has not 
been naturalized under their constitution and laws,** but under 
our statutes this is not strictly true. It is not within the scope 

Dig. H 179-m; "United States^' Dec, Dig, (Key-No.) i 125; Cent. Dig, f{ 

"Taylor t. Best, 14 O. B. 487. See **0aurt8," Deo. Dig. (Key-yo,) | SZl; 
Cent. Dig. ff 845-849. 

!• See King of Prussia v. Kuepper's Adm*r, 22 Mo. 690, 66 Am. Dec. 639; 
Tbe Sapphire t. Napoleon III, 11 Wall. 164, 20 L. Ed. 127; RepubUc of 
Colombia t. Ganca Go. (C. C.) 106 Fed. 837; King of Spain v. Oliyer, Fed. 
Cas. No. 7,814, 2 Wash. (G. a) 429. See ^'Courts;* Dec. Dig. (Key-No.) | 
$21; Cent. Dig. f{ 845-849- 

i«2 Kent, Gomm. 50; Dawson v. Godfrey, 4 Granch, 321, 2 L. Ed. 634; 
Ainslie t. Martin,' 9 Mass. 45& See ^'Alien*," Dec Dig. {Key-No.) | 1; Cent 
Dig. I 1. 



182 CAPACITT OF PARTIES (Ch. 6 

of this work to go fully into this question. The statutes and 
decisions must be consulted.^' The right of aliens to take, hold, 
and dispose of property, real or personal, is generally regelated 
by the states. In some states aliens are prohibited from acquiring 
and holding real property, while in others nonresidents are not 
given such right, while residents are; but in many states aliens, 
whether resident or not, have the same rights in this respect as 
native-born subjects.** In most, if not in all, the states they have 
the power to make and enforce contracts in respect to personal 
property, and such contracts may be enforced against them.** 
The rule does not apply to alien enemies. 

Alien Enemies *• 

An alien enemy is one who is the subject or citizen of some 
hostile state or power. War suspends all commercial intercourse 
between the belligerent countries, except so far as may be allowed 
by the sovereign authority, and all contracts which tend to in- 
crease the resources of the enemy or involve commercial dealing 
between the two countries are prohibited.** Nor can an alien 

IT As to who are aliens, see State ex rel. Thayer t. Boyd, 81 Neh. 682, 48 
N. W. 739, 61 N. W. 602 ; Boyd t. Nehraska ex rel. Thayer, 143 U. S. 135, 12 
Sup. Gt 375^ 86 Lw Ed. 103; State t. Andriano, 92 Mo. 70, 4 S. W. 263; Charles 
Green's Son v. Salas (C. C.) 31 Fed. 106; Ware v. Wisner (C. C.) 50 Fed. 310; 
City of Minneapolis ▼. Reum, 6 C. 0. A. 31, 56 Fed. 576; Comitis v. Parker- 
son (0. 0.) 56 Fed. 556, 22 L. R. A. 148; minor children of naturalized for- 
eiders, State t. Andriano, 92 Mo. 70, 4 S. W. 263 ; Behrensmeyer y. Kreitz, 
135 111. 591, 26 N. E. 704; State ex rel. Thayer v. Boyd, 81 Neb. 682, 48 N. W. 
739, 51 N. W. 602. Alien woman marrying a citizen becomes a citizen. Ware 
v. Wisner (C. C.) 50 Fed. 310. Minor children of foreign parents, whose 
mother, after the death of the father, marries a citizen, become citizens. 
Kreitz T. Behrensmeyer, 125 IlL 141, 17 N. E. 232, 8 Am. St Rep. 349. Chil- 
dren bom abroad of American citizens are citizens. Ware v. Wisner (C. 0.) 
50 Fed. 310. See "Aliens;* Deo, Dig. {Key-Vo.) % 1; Cent. Dig, { i. 

IB See Milliken v. Barrow (C. 0.) 55 Fed. 148; Manuel y. Wulff, 152 U. S. 
505, 14 Sup. Ct 651, 38 L. Ed. 532 ; McCreery*8 Lessee v. Allender, 4 Har. ft 
McH. (Md.) 409 ; Zundell y. Gess, 73 Tex. 144, 10 S. W. 693 ; Wunderle v. 
Wunderle, 144 111. 40, 33 N. R 105, 19 L. R. A. 84 ; Furenes v. Mickleson, 86 
Iowa, 508, 53 N. W. 416; Bennett v. Hibbert, 88 Iowa, 154, 55 N. W. 93. 
See **Aliens;' Dec. Dig. (Key-No.) { 6; Cent Dig. §§ 5-10. 

!• Taylor v. Carpenter, 3 Story, 458, Fed. Cas. No. 13,784; Franco-Texan 
Land Co. t. Chaptive (Tex. Sup.) 3 S. W. 31. See ** Aliens," Dec. Dig. {Key-No.} 
IS U, 16; Cent. Dig. %% 59, 61-66. 

20 Post, p. 36L 

SI Kershaw t. Kelsey, 100 Mass. 561, 97 Am. Dec. 124 1 Am. Rep. 142; 
United States t. Grossmayer, 9 Wall. 72, 19 L. Ed. 627 ; New York Life Ins. 
Co. Y. Davis, 95 U. S. 425, 24 L. Ed. 433; Williams ▼. Paine, 169 U. S. 55, 
18 Sup. Ct 279, 42 L. Ed. 658; O'Mealey y. Wilson, 1 Camp. 482; Phillips 
V. Hatch, 1 Dill. 571, Fed. Cas. No. 11,094 ; Hill ▼. Baker, 32 Iowa, 302, 7 Am. 
Rep. 193 ; Masterson t. Howard, 18 Wall. 99, 21 L. Ed. 764 ; Mutual Ben. Life 



§ 89) OONYIOTS 183 

enemy enforce any existing contract •• during the continuance of 
hostilities. These rules were applied to contracts between the 
respective citizens of the Northern and Southern states during 
the Civil War.** Though an alien enemy cannot sue on con- 
tracts during the continuance of hostilities, he may be sued, and 
in such case he may defend.** 

Same — Pre-existing Contracts 

Whether a pre-existing contract is dissolved or not by the war 
depends upon whether it is essentially antagonistic to the laws 
governing a state of war. If it is of a continuing nature, as in 
the case of a partnership, or of an executory character merely, 
and in the performance of its essential features would violate 
stich laws, it would be dissolved; but, if not, and rights have 
become vested under it, the contract will either be qualified, oi 
its performance suspended, according to its nature, so as to strip 
it of its objectionable features, and save such rights. The ten- 
dency of adjudication is to preserve, and not to destroy, con- 
tracts existing before the war.** 

SAME— CONVICTS 

89. In this country a convict can in most jurisdictions, unless pro- 
hibited by statute, make contracts, and sue and be sued 
thereon. 

At common law a person convicted of treason or felony was 
said to be civilly dead. He was not incapable of contracting, and 

loB. Ck>. T. HUlyard, 87 N. J. Law, 444, 18 Am. Rep. 741 ; Wrlgbt t. Qraham, 
4 W. Va. 430; Habrlcht v. Alexander, 1 Woods, 413, Fed. Cas. No. 6,886; De 
Jarnette v. De Givervllle, 66 Mo. 440. Bee **War,*' Dee. Dig, {Key-No.) | 15; 
Cent. Dig, {| 54-7P. 

*s Brooke t. Filer, 36 Ind. 402; Blackwell ▼. Willard, 66 N. C. 666, 6 Am. 
Uep, 749; Semmes v. Insurance Co., 36 Connl 643, Fed. Cas. No. 12,651. Set 
*'War,** Deo. Dig. {Key-No.) | 10; Cent. Dig. H 26-S6; **In9urr€ction,*' Cent 
Dig. I S. 

2s See cases in preceding notes. 

•* Dorsey v. Thompson, 37 Md. 26 ; McVeigh t. tTnlted States, 11 WalL 259, 
29 L. Ed. 80; Mixer ▼. Sibley, 63 111. 61; McNair t. Toler, 21 Minn. 176. See 
Clarke t. Morey, 10 Johns. (N. Y.) 69. See **War," Deo. Dig. {Key-No.) f 10; 
Cent. Dig, |{ 26-S6. 

ss Mutual Ben. Life Ins. Co. t. Hillyard, 37 N. J. Law, 444, 18 Am. Rep. 
741; Griswold v. Waddington, 16 Johns. (N. Y.) 57; Semmes t. City Fire Ins. 
Co., 36 Conn. 643, Fed. Cas. No. 12,651 ; Bank of New Orleans t. Matthews, 
49 N. Y. 12; Cohen v. Insurance Co., 50 N. Y. 610, 10 Am. Rep. 622; Waiihing- 
ton University v. Finch, 18 WalL 106, 21 L. Ed. 818; Whelan v. Cook, 29 
Md. 1 ; Dorsey t. Kyle, 30 Md. 612, 96 Am. Dec. 617; Dorsey y. Thompson, 37 
Md. 25. See "War,*' Dec. Dig. {Key-No.) | 10; Cent. Dig. S{ 26-S6. 



184 CAPACITT OF PARTIES (Ch. C 

his contracts could be enforced against him; but he could not 
invoke the aid of the courts for their enforcement.** The subject 
is now regulated in England by statutes, which declare convicted 
felons incapable of making any contract, and provide for the 
transfer of their property to trustees, who are given power to 
make contracts in regard to it.*^ 

With us the common-law rule is not recognized to any extent, 
and a convict undergoing a sentence of imprisonment, or even 
awaiting execution of a sentence of death, may, in the absence of 
statutory restrictions, enter into contracts, and sue or be sued 
thereon.** In some states, however, there are statutes declaring 
that a sentence of imprisonment in the penitentiary shall suspend 
air civil rights, and if for life shall render the convict civilly dead ; 
and such statutes have been construed to impose the same conse- 
quences as civil death at common law.** In some states, also, 
the statutes provide, as in England, for the transfer of the convict's 
property to trustees, with power to administer it and make con- 
tracts in regard to it.** The disability continues only during the 
imprisonment, and upon his receiving a pardon Or serving out 
his sentence the convicted person is restored to the control of his 
property and his power to contract*^ 

PROFESSIONAL STATUS 

90. In England a barrister cannot sue upon a contract for corny 
pensation for his services, but this disability does nox 
exist in the United States. / 

In England, a barrister cannot sue for fees due him for services 
rendered in the ordinary course of his professional duties, either 

>• Kynnalrd v. LesUe, L. R. 1 O. P. 889, 12 Jur. N. S. 4G8, 85 L. J. 0. P. 
21*G, 14 L. T. Rep. N. S. 756, 14 Wkly. Rep. 761. And see Avery ▼. Everett, 110 
X. Y. 317, 18 N. B. 148, 1 L. R. A. 264, 6 Am. St Rep. 368. Bee ^'Convicts,*' 
Deo, Dig. {Key-No,) | 4; Cent, Dig, % S, 

3 7 54 Geo. Ill, c. 45; 83 & 34 Vict c. 23. See Avery t. Everett, supra. 
See ''Convicts;' Deo. Dig, {Keu-No.) Sf S, 4; Cent, Dig, §§ «, S, 8, 

«»Platner v. Sherwood, 6 Johns. Ch. (N. Y.) 118; WUllngham v. King, 23 
Fla. 478^ 2 South. 851 ; In re Estate of Nerac, 85 Cal. 392, 95 Am. Dec. 111. 
Aud see Dade Coal Co. ▼. Haslett, 83 Ga. 549, 10 S. B. 435. Bee ''Convicts,** 
Deo. Dig. (Key-No,) f 4; Cent. Dig, S S. 

*• Avery v. Everett, supra ; Smith v. Becker, 62 Kan. 541, 64 Pac. 70, 68 U 
R. A. 141 ; In re EsUte of Nerac, 35 Cal. 392, 95 Am. Dec IIL Bee *'Cor^ 
victs^ Deo. Dig. (Key-No,) § 4; Cent. Dig, | 3. 

•0 Smith V. Becker, supra ; Williams v. Shackelford. 97 Mo. 822, U S. W. 222. 
See "Conviots,'' Dec. Dig, (Key-No.) f 4; Cent, Dig, { S, 

>i In le Deming, 10 Johns. (N. Y.) 232. Bee "Convicts^' Dec Dig. {fiey-No.} 
i 4; Cent, Dig. { A. 



tS 91-94) INFANTS 186 

upon an implied or an express contract. Formerly a physician 
was so lar in the same position as a barrister that, until the law 
^as changed by statute, the rendition of services on request rais- 
ed no implied promise to pay for them, though the patient might 
bind himself by express contract. But these disabilities are not 
to any extent recognized in this country.** There are, indeed, in 
most, if not all, the states, statutes prescribing certain requisites 
to entitle a physician, attorney, and certain other professional men 
to practice, suclf as the taking out of a license; and, until he has 
complied with the statute, he has no right to practice, and con- 
tracts made with him for professional services. are void. This, 
however, is properly for treatment later. •• 



INFANTS— IN GENERAL 

91. Some contracts of an infant are valid, and a few, in some juris- 

dictions, are absolutely void, but most of his contracts 
are simply voidable at his option. 

92. VALID CONTRACTS— The valid contracts of an infant are : 

(a) Contracts created by law, or quasi contracts. 

(b) Contracts entered into under authority or direction of law. 

(c) Contracts made in order to do what he was legally bound 

to do, and could have been compelled to do. 

93. VOID CONTRACTS— In some jurisdictions a contract of an 

infant which is manifestly and without doubt to his preju- 
dice is void. 

94. VOIDABLE CONTRACTS— The tendency is to hold all con- 

tracts other than valid ones simply voidable at the in- 
fant's option. 

In General 

An infant, at common law, is a person under twenty-one years 
of age, whether male or female; but in some jurisdictions, by 

»« VUas V. Downer, 21 Vt 419; Garrey t. Stabler, 07 Wia. 248, 30 N. W. 
787. 58 Am. Rep. STt; Price v. Hay, 132 IlL 643, 24 N. B. 620; Boyd v. Lee, 
as S. C. 19, 16 S. B. 332. In New Jersey, counsel fees, as such, cannot be 
recovered in the absence of an express agreement Van Atta t. McKinney's 
Bx'rs, 16 N. J. Law, 235 ; Blake ▼. aty of Elizabeth, 2 N. J. Law J. 328, Fed. 
Cas. Na 1,496; Hopper ▼. Ludlum, 41 N. J. Law, 182. It is otherwise where 
there Is an express agreement to pay for them. Zabriskie t. Woodruff, 48 N. 
J. Law, 610, 7 AU. 886. Bee ''Attorney and Client;* Dee. Dig. (Key-No,) ff 
758, J 59; Cent. Dig. %% S58, 361; **PhysioUini and Surgeone;* Dec. Dig. {Key- 
Ko.) f 24; Cent. Dig. U 63-eM. 

M See post, p. 325. 



186 CAPACITY OF PARTIES (Ch. 6 

Statute, females jittain their majority at eighteen, either for all 
purposes or for particular purposes specified in the statute. ' Since 
the common law, as a rule, does not regard fractions of a day, an 
infant becomes of age on the beginning of the day before his or 
her twenty-first or eighteenth birthday, as the case may be.** 

As we shall see, the contracts of an infant, as a rule, are not 
void, but simply voidable at his option. The rule is intended for 
the infant's benefit; and it may therefore be said that infancy in 
effect confers a privilege, rather than imposes a disability. 

Emancipation of an infant by his parent gives him the right to 
his earnings, aiyd releases him from his parent's control, but it 
does not remove his disability, and clothe him with the power to 
contract'* So statutes removing the common-law disabilities of 
married women do not operate to remove the disabilities of in- 
fancy from an infant married woman.'* 

The Old Doctrine as to the Effect of an Infant's Contract 

There is much confusion and conflict in the authorities as to the 
effect of the contracts of infants. In an early English case the doc- 
trine was stated to be that (1) where the court could pronounce 
the contract for the benefit of the infant, as for necessaries, it was 
good; (2) that where the court could pronounce it to be to his 
prejudice it was void ; and (3) that in those cases where the bene- 
fit or prejudice were uncertain the contract was voidable only.*^ 
And the same doctrine has been laid down by some of the Ameri- 
can courts and text writers.** 

This cahnot, however, be accepted as a correct statement of the 
law to-day. In the first place, many contracts are binding on an 

• 

t« Mete Cont (Heard*8 Ed.) 43 ; Herbert t. Tarball, 1 Keble, 589, Swell's 
Gas. 1; Bard well t. Purrington, 107 Mass. 419; State t. Clarke, 3 Har. (Del.) 
557; Hamlin ▼. Stevenson, 4 Dana (Ky.) 597; Wells t. Wells, 6 Ind. 447; 
Llnhart t. State, 88 Tex. Gr. B. 504, 27 S. W. 260. See ''Time,'' Deo. Dig. 
iKey-No,) { 11; Cent. Dig. | 5S. 

SB Mason v. Wright, 18 Meta (Mass.) 306; Tyler t. Fleming, 68 Midi. 185, 
35 N. W. 902, 18 Am. St Rep. 836; Genereux ▼. Sibley, 18 R. I. 43, 25 Atl. 
345; Wickbam t. Torley, 136 Ga. 594, 71 S. E. 881, 86 L. R. A. (N. S.) 57 
[cit Glark on Gontracts (2d Ed.) 150]. See **Infants," Deo. Dig. {Key-No.) f| 
9, 46; Cent. Dig, {§ 10, 98-110. 

•• Shipley ▼. Smith, 162 Ind. 526^ 70 N. B. 803. See ** Infante,** Dec. Dig. 
{Key-No.) S 10; Cent. Dig. f 11. 

•T Keane v. Boycott, 2 H. BL 511. See ''Infante;* Deo. Dig. {Key-No.) f 47; 
Cent. Dig. U 99-110. 

•• Vent V. Osgood, 19 Pick. (Mass.) 572 ; Tucker ▼. Moreland, 10 Pet 65, 
9 L. Ed. 345; Owen ▼. Long;, 112 Mass. 403; Dunton t. Brown, 31 Mich. 182; 
Green t. Wilding, 59 Iowa, 679, 13 N. W. 761, 44 Am. Rep. 696; Robinson ▼. 
Weeks, 56 Me. 102. See ''Infanti;* Deo. Dig. {Key-No.) | 47; Cent Dig. §| 
99-110. 



§§ 91-94) INFANTS 187 

infant without regard to whether they are for his benefit or not. 
In the second place, the great weight of authority is against mak- 
ing any distinction between contracts of an infant as being void 
or voidable, and in favor of holding all contracts other than valid 
ones, with a very few exceptions, simply voidable by the infant at 
his option.** The object of the law is merely to protect the infant, 
and this object is amply secured by not allowing the contract to be 
enforced against him during his infancy, and allowing him to re- 
pudiate it on attaining his majority. Moreover, such a distinction 
must necessarily be arbitrary and doubtful, for it must always be 
difficult, if not impossible, to say whether a particular contract may 
not possibly be beneficial. It is better to allow the infant to decide 
this question for himself when he becomes of age*^* 

Valid Contracts — Quasi Contracts 

Quasi contracts, or so called contracts created by law because of 
a legal duty on the part of the person bound, are as binding on an 
infant as on an adult.^^ The common law creates, as an incident 
to marriage, a duty on the part of the husband to pay the ante- 
nuptial debts of the wife, and this liability is imposed on infant as 
well as adult husbands.^* The liability of an infant for necessaries 
furnished him is quasi contractual.^* 

Same — Contracts Authorized by Law 

The rule that contracts of infants are voidable does not apply to 
contracts entered into by them under authority or direction of a 

••Henry t. Root, S3 N. T. 526; Fonda t. Van Home, 15 Wend. (N. Y.) 
631, 30 Am. Dec. 77; Holmes v. Rice, 46 Mich. 142,. 7 N. W. 772; Bool v. Mix, 
17 Wend. (N. Y.) 119, 31 Am. Dec. 285 ; LEMMON v. BEEMAN, 45 Ohio St 
505, 15 N. B. 470, Throckmorton Ca& Contracts, 140; Kendrlck ▼. Nelsz, 17 
Colo. 606, 30 Pac. 246 ; Owen ▼. Long, 112 Mass. 403 ; Fetrow y. Wiseman, 40 
Ind. 148 ; Mustard t. Wohlford's Heirs, 15 Grat (Va.) 329, 70 Am. Dea 209 ; 
Hunt T. Peake, 5 Cow. (N. Y.) 475, 15 Am. Dec. 476; Illinois Land &^Loan 
Co. V. Bonner, 76 IlL 315; COLE v. PENN0YE31, 14 IlL 158, Throckmorton 
Cas. Contracts, 131; Patchin v. Cromach, 13 Vt 330; Bozeman t. Browning, 
31 Ark. 364; Weaver t. Jones, 24 Ala. 420; Ridgeley t. Crandall, 4 Md. 435; 
McDonald ▼. Sargent, 171 Mass. 492, 51 N. B. 17; Union Cent Life Ins. Co. y. 
Hilllard, 63 Ohio St 478, 59 N. E. 230, 53 U R. A. 462, 81 Am. St Rep. 644; 
Englebert t. Troxell, 40 Ii^eb. 196, 68 N. W. 852, 26 L. R. A. 177, 42 Am. 
St Rep. 655. Bee **Infants," Dec Dig, {Kev-No.) | 47; Cent. Dig. || 99-110. 

«• Pol. Cont 52 ; 1 Pars. Cont 244. 

41 Bish. Cont § 906. 

4t Roach T. Quick. 9 Wend. (N. Y.) 238; Cole t. Seeley, 25 Vt 220, 60 Am. 
Dec 258; Butler v. Breck, 7 Mete. (Mass.) 164, 39 Am. Dec. 7G8; Mitchinson 
V. Hewson, 7 Term R. 348; Nicholson v. Wilbom, 13 Ga. 467; Anderson v. 
Smith, 33 Md. 466. Bee '^Infante;' Dec. Dig. iKey-No^^ || 10, 50; Cent. Dig. 
« 11, llk-in. 

«• Post, p. 199. 



188 ' CAPACITY OF PARTIES (Ch. C 

Statute or of the common law. For instance, a voluntary assign- 
ment of his property by an infant debtor imprisoned for debt, made 
under a statute allowing "every person" to make such an assign- 
ment, has been held valid and binding on him, notwithstanding his 
infancy,** So, also, where an infant executed a bond for the sup- 
port of his bastard child, in pursuance of a statute, it was held that 
the statute applied to infants, and that the bond was valid;** and 
a contract of enlistment in the army by an infant has been held 
valid.** 

It should be mentioned that in some jurisdictions the court is 
authorized by statute to remove the disabilities of infants in par- 
ticular cases.*^ And in some states it is provided by statute that 
if an infant, by permission of his parent or guardian, or by per- 
mission of law, practices any profession or trade, or engages in any 
business as an adult, he shall be bound by all contracts connected 
with such trade, profession, or business.** So, in at least one state^ 
an infant of a certain age is authorized by statute to make a valid 
contract of life insurance.** 

Same — Contract in Performance of Legal Obligation 

Nor- does the rule apply where, by his contract, an infant has 
only done that which he was bound by law to do and could have 
been compelled to do. In such a case the contract is valid, and he 

«« People T. Mullin, 25 Wend. (N^ Y.) 688. See "Infants,** Deo. Dig. {Key- 
A'o.) f 47; Oent, Dig. %% 99-110. 

4B People T. Hoores, 4 Denio (N. T.) 618, 47 Am. Dec. 272; and see McGall 
Y. Parker, 13 Mete. (Mass.) 872, 46 Am. Dec. 735; Bordentown Tp. y. Wallace, 
50 N. J. Law, 13, 11 Atl. 267 ; Gavin t. Burton, 8 Ind. 69 ; Stovt^rs v. HolUs, 
83 Ky. 644. An Infant's recognizance for appearance at court is binding. 
State T. Weatherwax, 12 Kan. 463; Dial t. Wood, 9 Baxt (Tenn.) 296. See 
"Infants,** Dec. Dig. (Key-No.) i 47; Cent. Dig. f{ 99-110. 

<• United States ▼. Balnbrldge, 1 Mason, 71, Fed. Cas. No. 14,497; Common- 
wealth V. Murray, 4 Bin. (Pa.) 487, 5 Am. Dec. 412; United States t. Blakeney, 
3 Grat. (Va.) 405 ; In re Higgins, 16 Wis. 351 ; In re Hearn (D. C.) 32 Fed. 141. 
At common law an enlistment was not voidable by the infant or his parent 
Morrissey v. Perry, 137 U. S. 157, 11 Sup. Ct 57, 34 I* Ed. 644. See "Army 
and Navy,** Dec. Dig. {Key-No.) % 19; Cent. Dig. §§ 45-50. 

*T See Doles ▼. Hilton, 48 Ark. 305, 8 S. W. 193; Brown v. Wheelock, 75 
Tex. 385, 12 S. W. Ill, 841 ; McKamy v. Cooper,* 81 Ga. 679, 8 S. E. 312 ; 
Emancipation of Pochelu, 41 La. Ann. 331, 6 South. 541 ; Succession of Gaines^ 
42 La. Ann. 699, 7 South. 78a See "Infants," Deo. Dig. (Key-No.) { II; 
Cent. Dig. | 12. 

*« Wickham t. Torley, 136 Ga. 594, 71 S. E. 881, 36 L. R. A. (N. S.) 57. 
See "Infants,** Dec. Dig. (Key-No.) § 46; Cent. Dig. |$ 9S-110, 

*» Hamm t. Prudential Ina. Co. of America, 137 App. Div. 504, 122 N. T. 
Supp. 35 (age 15). See "Infants," Dec. Dig. (Key-So.) i 46; Cent. Dig. U 
f^IlO. 



§§ 91-94) INFANTS 189 

cannot avoid it.** Under this rule, a conveyance of land by an in- 
fant, which he could have been compelled in equity to make, is 
binding on him. ' Where, for instance, a father purchased land, and 
took the title in the name of his son, and the son afterwards during 
his minority conveyed it to a purchaser from his father, the con- 
veyance was held to be binding on the ground that he merely part- 
ed with the naked title, and only did that which a court of equity 
would have compelled him to do."^ In the leading case on this 
point an infant mortgagee had, on payment of the mortgage debt to 
the persons entitled to receive it, made a reconveyance of the land, 
and the court held that, as this was an act which by law he could 
have been compelled to perform, his voluntary performance of it 
was binding, notwithstanding his infancy.*' 

It is said in a New York case : "When an infant is under a legal 
obligation to do an act, he may bind himself by a fair and reason- 
able contract made for the purpose of discharging the obligation. 
If this be not a general rule, it is at least one of pretty wide appli- 
cation." *• 

Same — Executed Contract 

In some jurisdictions it is held that, if the contract is so far exe- 
cuted that the infant has received the consideration, he cannot re- 
pudiate the contract, and recover what he has paid, or for what he 
has done, unless he can and does place the other party in statu quo. 
This doctrine, as we shall see, is not generally accepted in cases 
where the consideration cannot be returned.** 



»• Co. Lltt 172a ; 2 Kent, Comm. 242 ; Tucker v. Moreland, 10 Pet 58, 9 L. 
Ed. 345 ; Prouty v. Edgar, 6 Iowa, 358 ; Jones v. Brewer, 1 Pick. (Mass.) 814 ; 
Baker v. Lovett, 6 Mass. 78, 4 Am. Dea 88 ; Trader v. Jarvls, 23 W. Va. 100 ; 
Nordholt ▼. Nordbolt, 87 Cal. 552, 20 Pac. 509, 22 Am. St Rep. 268; Starr 
▼. Wright, 20 Ohio St 97. A voluntary equal partition by an infant since lie 
could be compelled to make it is yalid. Vavington ▼. Clarke, 2 Pen. ft W. 
(Pa.) 115, 21 Am. Dec 432 ; (^ocks y. Simmons, 57 Miss. 183. So, also, a con- 
tract by a minor with the mother of his bastard child to support it is binding. 
Stowers v. Hollis, 83 Ky. 544; Gavin t. Burton, 8 Ind. 69. And see note 45, 
supra. So a note given by an Infant in settlement of his liability for a tort 
Ray V. Tubbs, 50 Vt 688, 28 Am. Rep. 519. See ''Infant^,** Dec. Dig. (Keu-No.) 
§ 4^; Cent. Dig. §§ 98, 99, 

61 ElUott V. Horn, 10 Ala. 348, 44 Am. Dec. 488. See "Infants/* Dee. Dig. 
{Key-No.) § 46; Cent. Dig. §§ 9S-110. 

»« Zouch V. Parsons, 3 Burrows, 1801. See **Infants;* Dec. Dig. (Key-No.) | 
46 r Cent. Dig. §| 98-110. 

»» People V. Moores, 4 Denio (N. T.) 518, 47 Am, Dec. 272. See "Infants," 
Dee. Dig. (Key-No.) S 46; Cent. Dig. U ^8, 99. 

»* Post p. 216. 



190 CAPACITY OF PARTIES (Ch. 6 

I 

t 

^Oid Contracts 

As already stated, some courts still hold ^ that contracts mani- 
festly a,nd without doubt prejudicial to the infant are void.** 
Among the contracts which have been held void upon this ground 
may be mentioned conveyances of land without consideration,** 
contracts of suretyship,*' and obligations with a penalty.** This, 
however, is no longer the prevailing doctrine. / 

The rule is generally recognized that contracts entered into on 
behalf of an infant by an agent acting under a power of attorney 
from him are void, at least where authority to make the particular 
contract could be 'given by an adult only by power of attorney.* * 

Voidable Contracts ' 

Under the prevailing doctrine that the contracts of an infant are 
voidable, and not void, contrary to the decisions mentioned in the 
preceding paragraph, some courts have held contracts of surety- 
ship,** and bonds with a penalty,** merely voidable. Probably all 
courts regard as merely voidable purchases or sales and conveyanc- 
es of real or personal property, including mortgages, for a consider- 
ation,** partnership agreements,** agreements to render services,** 

SB Ante, p. I86l ^or a collection of cases on tbe question when a contract by 
an Infaiit Is to t)e held void and when merely voidable, see Ewell, Lead. Gas. 
30-34, 44-46, 52-56. See 'InfanU;* Deo. Dig. {Key-No.) | 47; Cent. Dig. %% 
99-110. 

«• Robinson y. Coulter, 90 Tenn. 705, 18 S. W. 250, 25 Am. St Rep. 70& See 
^'Infants,'' Dee. Dig, {Key-No,) ^ 47; Cent. Dig. {{ 99-110. 

BT Maples ▼. Wlghtman, 4 Conn. 876, 10 Am. Dec. 149. See **Infant8,** Deo. 
Dig. {Key-No.) | 47; Cent. Dig. §f 99-110. 

»• Flshei V. Mowbray, 8 East, 330; Baylls v. Dlnely, 3 Maule & S. 477. See 
*'Infants;* Dec Dig. {Key-No.) § 47; Cent. Dig. §f 99-110. 

•• Trueblood y. Trueblood, 8 Ind. 195, 65 Am. Dec 756. And see post, p. 191. 
See ** Infants,** Deo. Dig. {Key-No,) J 5; Cent. Dig. §S 5, 7. 

•oOwen V. Long, 112 Mass. 403; Fetrow v. JViseman, 40 Ind. 148; Wil- 
liams V. Harrison, 11 S. C. 412; Hamer v. Dlpple, 31 Ohio St 72, 27 Am. Rep. 
496. See ^'Infants,** Deo. Dig. {Key-No.) f 47; Cent. Dig. U 99-110. . 

•1 Mustard v. Wohlford's Heirs, 15 Grat (Va.) 329, 76 Am. Dec. 209; Weav- 
er T. Jones, 24 Ala. 420 ; Reed v. Lane, 61 Vt 481, 17 Atl. 79a See **Infant8,** 
Dec. Dig. {Key-No.) { 47; Cent. Dig. §§ 99-110. 

•«COLB V. PENNOYER, 14 III. 158, Throckmorton Cas. Contracts, 131 ; Ir- 
vine V. Irvine, 9 Wall. 617, 19 L. Ed- 800; Zouch v. Parsons, 3 Burrows, 1794; 
Bigelow V. Kinney, 3 Vt 353, 21 Am. Dea 589; Dixon v. Merritt 21 Minn. 196; 
Hastings V. Dollarhlde, 24 Cal. 195; Logan v. Gardner, 136 Pa. 588, 20 Atl. 
625, 20 Am. St Rep. 939; French v. McAndrew, 61 Miss. 187; Henry v. Root 
33 N. Y. 526; Callls v. Day, 38 Wis. 643; Manning v. Johnson, 26 Ala. 446, 62 
Am. Dec. 732. See ^'Infants,** Dec. Dig. {Key-No.) f 47; Cent. Dig. §t 9^-110. 

•• Dun ton v. Brown, 31 Mich. 182. See '* Infants,** Deo. Dig. {Key-No.) i 54; 
Cent. Dig. {§ 1S0-1S4. 

•« Vent V. Osgood, 19 Pick. (Mass.) 572 ; Clark v. Goddard, 39 Ala. 164, 84 



8§ 91-94) iNFAirrs 191 

promissory notes,*' indorsement of a promissory note/' and* the 
like" 

Appointment of Agent 

It is very generally laid down, even by courts which do not rec- ^ 
ognize the old doctrine as to void and voidable contracts, that an 
infant cannot appoint ai^ agent or attorney, and that such appoint- 
ment, and consequently all acts and contracts of the agent there- 
under, arc void,*' subject to an exception where the appointment 
is to do an act to the infant's advantage, as to receive seisin." It 

Am. Dec. 777; Harney ▼. Owen, 4 Blackf. (Ind.) 837, SO Am. Dec. 662. And 
see post, p. 219. Bee **Infant9," Deo, Dig. (Key-No,) i 47; Cent. Dig. SS 99-110. 

«• Goodsell ▼. Myers, 3 Wend. (N. Y.) 479; Fetrow v. Wiseman, 40 Ind. 148; 
Wamsley ▼. Undenberger, 2 Rand. (Va.) 478; Earle ▼. Reed, 10 Mete (Mass.) 
389 ; Minock ▼. Shortridge, 21 Mich. 314. See **Infanta," Deo. Dig. (Key-No.) S 
47 ; Cent. Dig. U 99-110. 

•• Nightingale ▼. Withlngton, 15 Mass. 272, 8 Am Dec 101 ; Willis ▼. Twam- 
bly, 13 Mass. 204; Frazier v. Massey, 14 Ind. 882; Briggs ▼. McOabe, 27 
Ind. 327, 89 Am. Dec. 503. Bee '^Infants,'' Deo. Dig. (Key-No.) { 47; Cent. 
Dig. H 99-110. 

«T Lease by or to infant Zonch ▼. Parsons, 3 Bnrrows, 1794; GrifDth ▼. 
Schwenderman, 27 l(o. 412. Submission to arbitration. Jones v. Bank, 8 N. 
Y. 228; Bamaby ▼. Bamaby, 1 Pick. (Mass.) 221. Settlement of disputed 
boundary. Brown ▼. Caldwell, 10 Serg. ft R. (Pa.) 114, 13 Am. Dea 660. Com- 
promise of action or claim. Ware v. Cartledge, 24 Ala. 622, 60 Am. Dec. 489 ; 
Baker ▼. Lovett, 6 Mas& 78, 4 Am. Dec. 88. An infant's promise to marry is 
voidable at his or her option. Holt ▼. Ward Clarencieux, 2 3trange, 937, 
Ewell, Lead. Cas. 50; Hunt v. Peake, 5 Cow. (N. Y.) 475, 15 Am. Dec 475; 
Rush Y. Wick, 31 Ohio St 521, 27 Am. Rep. 523; Cannon ▼. Alsbury, 1 A. 
K. Marsh. (Ky.) 76, 10 Am. Dea 709; Warwick ▼. (}0(0per, 5 Sneed (Tenn.) 659. 
And it has been held that a statute providing that persons under the age of 
21 years "may contract and be joined in marriage" does not remove an in- 
fant's disability in this respect, so as to render him liable for breach of prom- 
ise to marry. McConkey v. Barnes, 42 IlL App. 511. Bee **Infant8,*' Deo. Dig. 
(Key-No.) % 47; Cent. Dig. (f 99-^110. 

«• Saunderson v. Marr, 1 H. Bl. 75; Doe ▼. Roberts, 16 M. & W. 778; Fonda 
V. Van Home, 15 Wend. (N. Y.) 631, 30 Am. Dec. 77 ; Bool v. Mix, 17 Wend. 
(N. Y.) 120, 31 Am Dec. 285 ; Bennett v. Davis, 6 Cow. (N. Y.) 393 ; Knox v. 
Flack, 22 Pa. 337; Waples v. Hastings, 3 Har. (DeL) 403; Wainwright v. 
Wilkinson, 62 Md. 146; PhUpot v. Bingham, 55 Ala. 439; Pyle v. Cravens, 4 
Litt (Ky.) 17 ; Lawrence's liCssee v. McArter, 10 Ohio, 37 ; Armitage v. Widoe, 
36 Mich. 124; Tnic^blood v. Trueblood, 8 Ind. 195, 66 Am. Dec. 756; Holden 
▼. Curry, 85 Wis. 5(>4, 55 N. W. 965 ; Wambole v. Foote, 2 Dak. 1, 2 N. W. 239. 
See, also, Bartholomew ▼. Dighton, Cro. Eli2. 424; Whittingham's Case, 8 
Co. 42b ; Dexter ▼. Hall, 15 Wall. 9, 25, 21 L. Ed. 73 ; Tucker v. Moreland, 10 
Pet 58, 68^ 9 L. Ed. 345; Flexner v. Dlckerson, 72 Ala. 318; COLE v. PEN- 
NOYER, 14 HL 158, Throckmorton Cas. Contracts, 131 ; Fetrow v. Wiseman, 
40 Ind. 148, 155 ; Bums v. Smith, 29 Ind. App. 181, 64 N. E. 94, 94 Am. St . 
Rep. 26a Bee '^Infanttr Dec. Dig. (Key-No.) S S; Cent. Dig. {8 5, 7. 

••Zouch V. Parsons, 3 Burr. 1794, 1805, 1808. See Duvall ▼. Graves, 7 
Bush (Ky.) 46L Bee ^'Infants;' Deo. Dig. (Key-No.) { 5; Cent. Dig. H 5, 7. 



192 CAPACITT or PARTIB8 (Ch. 8 

is noticeable, however, that nearly all the cases which lay down 
this rule are cases involving warrants of attorney to confess judg- 
ment and powers of attorney to execute a deed; and while as to 
these the rule appears to be firmly established, the tendency of the 
Mater decisions is to confine the rule to such cases, and in other 
cases to hold an infant's appointment of an agent and the acts and 
contracts made under it as voidable, and not void J* 



SAME— LIABILITY FOR NECESSARIES 

95. An mfant is liable for the reasonable value of necessaries fur- 

nished him. 

96. What are necessaries will depend upon the particular circum- 

stances. The term includes whatever is reasonably needed 
for his subsistence, healthy comfort, or education, taking in- 
to consideration his age, state, and condition in life. The 
following rules may be stated : 

(a) The things furnished must concern his person, and not his 

estate, 

(b) He is not liable for money borrowed, and expended for nec- 

essaries, unless the lender sees that it is so expended. 

(c) An infant is liable for necessaries furnished his wife, and, in 

some jurisdictions, his children. 

(d) Persons supplying an infant act at their peril, and cannot re- 

cover if the actual circumstances were such that the things 
furnished were not necessaries. 

91. The liability of an infant for necessaries is not contractual, but 
quasi contractual, and his express contract for necessaries 
is voidable; but in some jurisdictions a recovery to the ex- 
tent of their reasonable value is allowed in an action upon 
the express contract. 

Among the contracts which are manifestly for the benefit of an 
infant, and hence binding, it is frequently said are his contracts for 
necessaries.''* The obligation of an infant to pay for necessaries 

T« Whitney ▼. Dutch, 14 Mass. 457, 7 Am. Dec 229; Welch v. Welch, 103 
Mass. 562; Moley ▼. Brine, 120 Mass. 324; Fairbanks ▼. Snow, 145 Mass. 153. 
13 N. B. 596, 1 Am. St Rep. 446, per Holmes, J. ; Hardy v. Waters, 38 Me. 
450; Towle ▼. Dresser, 73 Me. 252; Patterson ▼. Lippincott, 47 N. J. Law, 457, 
1 Atl. 606, 54 Am. Rep. 178 ; Hastings ▼. Dollarhlde, 24 Cal. 195 ; CourSoUe v. 
Weyerhauser, 69 Minn. 328, 72 N. W. 697. See Tiffany, Ag. 94. See "Infants;' 
Dec Dig. {Key-No,) S 57; Cent, Dig. S 137. 

Ti McConnell v. McCJonnell, 75 N. H. 385, 74 Atl. 875. And see post, p. 199. 
See ''Infants,** Deo. Dig. (Key-No.) 8 50; Cent. Dig, {f IU-127. 



S§ 95-97) LIABILITY FOB NBOB88ABIE8 t93 

furnished to him is, however, quasi contractual, rather than con- 
tractual. This is shown by the rule that, while he is liable for nec- 
essaries actually furnished, he is not liable on an executory con- 
tract for necessaries,^' and by the further fact that he is liable to 
pay, not the price, but the reasonable value, of the necessaries.^* 

What are Necessaries — In General 

Lord Coke has said that an infant's necessaries are "his necessary 
meat, dripke, apparel, necessary physicke, and such other necessa- 
ries, and likewise for his good teaching or instruction, whereby he 
may profit himself afterwards." ^* Under this rule necessaries will 
include whatever is reasonably needed for the infant's subsistence, 
such as food and lodging ; ^* for his health, such as medicine, and 
services of a physician or nurse in case of sickness ; *• for his com- 
fort,^* and for his education.^* The term is not limited to what 
is necessary to the actual support of life, but extends "to articles 
fit to maintain the particular person in the state, station, and degree 

T3 WaUin ▼. Highland Park' Go., 127 Iowa, 181, 102 N. W. 839, 4 Anb. Gas. 
421 ; Jones t. Valentines' School of Telegraphy, 122 Wis. 818, 99 N. W. 1043. 
See **InfanU," Dec Dig. {Key-No.) f SO; Cent. Dig, %% lH-1%7. 

T» Post, p. 644. 

T4 Co. Litt 172a. For a good discussion of the law i|i regard to necessaries, 
see Ryder ▼. Wombwell, L. R. 8 Exch. 95. Bee ''InfanU!* Dec Dig. (Key-No.) 
I 60; CmU. Dig. U m^in. . 

ri Barnes ▼. Barnes, 50 Conn. 672; Rivers ▼. Gregg, 6 Rich. Eq. (S. G.) 274^ 
Dinners supplied to a student at private rooms at a university, prima facie 
not necessaries. Brooker v. Scott, 11 Mees. & W. 67 ; Wharton v. McEenzie, 
5 Q. B. 606. Hotel bill. Watson v. Gross, 2 Duv. (Ky.) 147. Dwelling house 
not a necessary. Allen v. Lardner, 78 Hun, 608, 29 N. Y. Supp. 213. See 
"/fi/afU«,- Dec Dig. (Key-No.) 8 50; Cent, Dig. {{ lU-ltJ. 

Tc Gibba V. Poplar Bluff Light & Power Co., 142 Mo. App. 19, 125 S. W. 
840; Glover & Co. v. Ott's Adm'r, 1 McCord (S. O.) 572; Werner's Appeal. 
91 Pa. 222. And see Hoyt v. Casey, 114 Mass. 397, 19 Am. Rep. 371 ; Wail- 
ing V. Toll, Johns. (N. Y.) 141. A horse may be necessary for health, Hart 
V. Prater, 1 Jur. 623 ; Harrison v. Fane, 1 Man. & G. 550 ; but not if for 
pleasure, note 86, infra. See **Infanta/* Deo. Dig. (Key-No.) f 50; Cent. 
Dig, n lU-in. 

If Dentist's services. Strong v. Foote, 42 Conn. 203. An infant is liable 
for reasonable attorney's fees for defending him in^a criminal prosecution. 
Askey v. Williams, 74 Tex. 294, 11 S. W. 1101, 5 L. R. A. 176 ; Barker v. Hib- 
bard, 54 N. H. 539, 20 Am. Rep. 160. And see Munson v. Washband, 31 Conn. 
803, 83 Am. Dea 151 ; Crafts v. Carr, 24 R. I 397, 53 AtL 275, 60 L. R. A. 
128, 96 Am. St Rep. 721 ; Wedding outfit Jordan v. Coffield, 70 N. G. 110 ; 
Sams V. Stockton, 14 B. Mod. (Ky.) 232. Clothing. Mackerell v. Batchelor, 
Gro. Gliz. 583; Glover & Co. v. Ott's Adm'r, 1 McCord (S. C.) 572. But not 
for an unnecessary supply of clothing. Johnson v. Lines, 6 Watts & S. (Pa.) 
80^ 40 Am. Dea 542; Burghart v. Angerstein, 6 Car. & P. 690. Bee "in- 
fanur Dec Dig. (Key-No.) | SO; Cent. Dig, H llk-lfil. 

T« See post, p. 194. 

CULBK Cont.(3d Ed.)^13 



194 CAPACITY or PARTIES (Ql. 6 

in' life in which he is,** so that things may be necessary for one per- 
son which would not be necessary for another in a different station 
in life.^» 

The construction of the general rule is w^ll illustrated in its ap- 
plication to education. Thus, a common-school education is con- 
ceded to be a necessary as essential to the transaction of ordinary 
business and to the intelligent discharge of civil, political, and re- 
ligious duties.** While under exceptional circumstances of wealth 
or station in society a college education may be a necessary, yet 
the great majority of persons pass through life/ without it, and it 
has been held that under ordinary circumstances it is not a neces- 
sary.*^ Whether or not a technical or professional education is a 
necessary depends upon the facts and circumstances of the particu- 
lar case.** 

Tt Peters ▼. Fleming, 6 Mees. ft W. 46 ; Ewell, Lead. Cae. 66 ; Ryder ▼. 
Wombwell, L. R. 4 Exch. 32; McKANNA ▼. MERRY. 61 111. 177, Throck- 
morton Gas. Contracts, 135; Breed y. Jndd, 1 Gray (Mass.) 455; Squier t. 
Hydliff,N9 Mich. 274; Wilhelm y. Hardman, 13^ Md. 144; Jordan ▼. Ck>ffleld, 
70 N. G. 110; Nicholson t. Spencer, 11 Ga. 610; Manldin ▼. Southern Short- 
hand & Business University, 126 Ga. 681, 55 S. B. 922, 8 Ann. Gas. 130 [qnot 
Clark on Contracts (2d Ed.) 156]. Board of four horses for six months, the 
principal use of which was in the business of an infant as a hackman, though 
the horses were occasionally used to carry his family out to drive, was held 
not necessary. Merriam v. Cunningham, 11 Gush. (Mass.) 40. Livery for the 
servant of an Infant officer in the army was held a necessary. Hand v. Sla- 
ney, 8 Term R. 578. And see Coates v. Wilson, 5 £sp. 152. But not cock- 
ades ordered for his soldiers. Hand v. Slaney, supra. *' Articles of mere 
luxury are always excluded, though luxurious articles of utility are in some 
cases allowed." Chappie v. Cooper, 13 Mees. ft W. 252. Bee **Infants,** Dee. 
Dig, (Key-No.) S 60; Cent. Dig. || 114-127. 

•0 Middlebury College v. Chandler, 16 Vt 686, 42 Am. Dec 587. Board bill 
contracted by an infant to enable him to attend school is a necessary ex- 
pehse. Kilgore Y.Rich, 83 Me. 305, 22 Atl. 176, 12 U R. A. 859, 23 Am. St 
Rep. 780. Bee "^Infante," Deo. Dig. (Key-No.) U 50, 5S; Cent. Dig. SS 114, 
116. 

•1 Middlebury College v. Chandler, supra; Pickering v. Gunning, W. Jones, 
182. Bee "Infants^ Dec. Dig. (Key-No.) || 50.^53; Cent. Dig. §§ 114, 116. 

•sBouchell V. Clary, 3 Brev. (S G.) 194; Mauldin v. Southern Shorthand 
ft Busihess University, 126 Ga. 68l, 55 S. E. 922, 8 Ann. Gas. 130 {course iu 
stenography). Thus, under certain circumstances, a medical education has 
been held not to be necessary. Turner v. Gaither, 83 N. G. 357, 35 Am. Rep. 
574; while under other circumstances, it has been conceded that a course 
In pharmacy is necessary. Wallin v. Highland Park Co., 127 Iowa, 131, 102 
N. W. 839, 4 Ann. Gas. 421. Whether preliminary education in arithmetic, 
algebra, geometry, and mechanical drawing as part of a correspondence 
course in electricity was necessary to an infant who had spent two years in 
a hieh school was a question of fact for the jury. International Text-Book 
Go. V. Doran, 80 (>)nn. 307, 68 AU. 255. Bee ^'Infants,'' Deo. Dig. (Key-No.) 
U SO, 5S; Cent. Dig. S 114. 



§§ 95-97) LIABILITT FOB NBOBS8ARIS8 195 

While, therefore, as a general rule, the question must depend on 
the circumstances of each particular case, there are, of course, some 
things which are obviously incapable of being deemed necessaries. 
A wild animal or a steam roller, or a railroad engine, cannot, under 
any circumstances, be deemed such. And the same has been held 
of life insurance,** 

Nor can things intended for ornament, and not for use,** or 
merely for pleasure,** be regarded as necessary. Again, things may 
be of a useful or necessary character, but the quality or quantity 
supplied may take- them out of the character of necessaries.** Ele- 
mentary text-books might be necessary to a law student.; but not 
a rare edition, nor a great number of copies of a single book. 
Things necessary to a person in one statioa of life might not be 
necessary to a person in a different station. Again, things not usu- 
ally necessary may become so from the circumstances of the in- 
fant. Medical attendance and expensive 'articles of food may ordi- 
narily be dispensed with, but may become necessary in case of ill 
health. ' 

Things with which an infant is already sufficiently supplied are 
not necessary.** An infant residing under the care of his father or 

•* Simpson Y. Prudential Ins. Co. of America, 184 Mass. 848, 68 N. B. 673, 
63 li. R. A. 741, 100 Am. St. Rep. 660. Bee ^'Infants;* Dea Diff. {Kev-No.) | 
50; Cent. Dig. U 115-121. 

•4 Peters v. Fleming, 6 Mees. & W. 42 ; McKANNA v. MERRY, 61 lU. 179, 
Throckmorton Cas. Contracts, 135. Bee "InfanU/* Deo. Dig. {Key-No,) SI 
50, 5S; Cent. Dig. fS lU, 116. 

•» McKANNA V. MERRY, 61 IlL 179, Throckmorton Cas. Contracts, 185 ; 
Glover v. Otfs Adm'r, 1 McCord (S. C.) 572; Beeler v. Young, 1 Bibb (Ky.) 
519. Horse, carriage, or bicycle not ordinarily a necessity. House t. Alex- 
ander, 105 Ind. 109, 4 N. E. 891, 55 Am. Rep. 189 ; Miller ▼. Smith, 26 Minn. 
248, 2 N. W. 942, 37 Am. Rep. 407 ; Pyne v. Wood, 145 Mass. 558, 14 N. B. 
775; Beeler t. Young, 1 Bibb (Ky.) 519; Howard ▼. Simpkins, 70 Ga. 322; 
Hefflngton ▼. Jackson, 43 Tex. Civ. App. 560, 96 S. W. 108 (buggy and har- 
ness). A horse, however, may be necessary for health. Note 76^ supra. 
Money furnished to enable an Infant to take a necessary trip may be neces- 
sary, but not to take a trip for pleasure. Breed v. Judd, 1 Gray (Mass.) 455 ; 
McKANNA Y. MERRY, supra. Tobacco is prima fade not necessary. Bry- 
ant V. Richardson, 12 Jur. (N. S.) 800. Bee *'Infanta;*' Deo. Dig. {Key-No.) {§ 
50, 55: Cent. Dig. || lU, 116. 

•• Ryder t. Womb well, L. R 8 Exch. 95 ; Burghart v. Angerstein, 6 Car. 
& P. 690 ; Johnson v. Lines, 6 Watts & S. (Pa.) 80, 40 Am. Dec 542 ; Nichol- 
son V. Spencer, 11 Ga. 610. ^Bee "Infants,'* Deo. Dig. {Key-No.) S 50; Cent. 
Dig. §1 m-127. 

ST Barnes v. Toye, 18 Q. B. Div. 410 ; Davis v. Caldwell, 12 Cush. (Mass.) 
512; Kline v. L'Amoureux, 2 Paige (N. Y.) 419, 22 Am. Dec. 652; Rivers ▼. 
Gregg, 5 Rich. Eq. (S. C.) 274; McKANNA v. MERRY, 61 IlL 180. Throck- 
morton Cas. Contracts, 135; Nicholson v. Wilbom, 13 Ga. 467; Bainbridge 
▼. Pickering, 2 W. BL 1325 ; Burghart v. Angerateln, 6 Car. & P. 690 ; Perrin 



106 CAPACITY OF PARTIES (Ch. 6 

« 

guardian, and supported by him, is not liable even for necessaries ; 
and it even seems that this is so notwithstanding the poverty of his 
father.** It has been held that the fact that an infant is abundantly 
supplied with money, so that he can purchase necessaries for cash if 
he chooses, is not equivalent to being supplied, and he will never- 
theless be liable for necessaries bought on credit; but there is au- 
thority to the contrary/* 

Must Concern His Person 

The things furnished, to come within the term "necessaries,'' 
must concern the person of the infant, and not his estate. An in- 
fant, therefore, is not bound by contracts for things necessary to 
carry on a business into which he enters.** He is not liable for ma- 
terials purchased and used for the erection of a house on his land,** 
and it has even been held that he is not liable for the expense of 
repairing his dwelling house on a contract made by him therefor, 
although the repairs may have been necessary to prevent immedi- 

▼! Wilson, 10 Mo. 461; Guthrie y. Marphy, 4 Watts (Pa.) 80, 28 Am. Dec. 
681 ; note 86, supra. Bee **Infant8** Dec, Dig. (Key-Hfo,) | 50; OerU. Dig. H 
114-127. 

tsHoyt ▼. Casey, 114 Mass. 807, 19 Am. Rep. 371; Balnbridge ▼. Picker- 
log, 2 W. BI. 1325; EweU, Lead. Gas. 55; Walling ▼. Toll, 9 Johns. (N. Y.) 
141 ; Guthrie ▼. Murphy» 4 Watts (Pa.) 80, 28 Am. Dec. 681 ; Decell y. Lew- 
enthal, 57 Miss. 331, 84 Am. Rep. 449 ; Kline y. L' Amoureux, 2 Paige (N. Y.) 
419, 22 Am. Dec. 652; Perrln y. Wilson, 10. Mo. 451; Trainer y. Trum- 
bull, 141 Masa 530, 6 N. B. 761; Jones y. GolYin, 1 McMul. (S. G.) 14; 
Elrod Y. Myers, 2 Head (Tenn.) 83 ; Kraker y. Byram, 18 Rich. Law (S. G.) 
163; Freeman y. Bridger, 49 N. G. 4, 67 Am. Dea«258; Hull's Assignees y. 
Gonnolly, 3 McGord (S. G.) 6, 15 Am. Dec 612. A complaint, however, is not 
demurrable for failure to allege refusal of the parent^ or guardian to supply 
the infant, or that there was no person who could and would support him. 
Goodman y. Alexander, 165 N. Y. 289, 59 N. B. 145, 55 L. R. A. 781. See "/n- 
fants," Dec. Dig. {Keg-No,) 4 50; Cent. Dig. K 114-127. 

•• Burghart y. Hall, 4 Mees. &, W. 727. But see Rivers y. Greggs, 5 Rich. 
Bq, (S. G.) 274; Barnes y. Toye, 13 Q. B. DiY. 410. Bee **lnfanu;' Deo. Dig. 
(Key-No.) I 60; Cent. Dig. %\ 114-127. 

•0 House Y. Alexander, 105 Ind. 109, 4 N; B. 891, 55 Am. Rep. 189 ; Mason- 
Y. Wright, 13 Mete. (Mass.) 806 ; Stem y. Meikleham, 56 Hun, 475, 10 N. Y. 
Supp. 216; Paul Y. Smith, 41 Mo. App. 275; Decell y. Lewenthal, 57 Miss. 
331, 34 Am. Rep. 449 ; Merriam y. Gunningham, 11 Gush. (Mass.) 40 ; State 
▼. Howard, 88 N. G. 650 ; Wood y. Losey, 50 Mich. 475, 15 N. W. 557 ; Dllk 
Y. Relshley, 2 Esp. 480; Wallace y Leroy, 57 W. Va. 263, 30 S. B. 243, 110 
Am. St Rep. 777 (even thougn he derives his living from the business). Bee 
"Infants:* Deo. Dig. {Key-No.) S 50; Cent. Dig. §S 114-127. 

•1 Womock Y. Loar (Ky.) 11 S. W. 438; Freeman v. Bridger, 49 N. G. 1, 67 
Am. Dec. 258 ; Price v. Jennings, 62 Ii^. 111. Nor is his property subject to 
a mechanic's lien therefor. Bloomer v. Nolai^, 36 Neb. 51, 53 N. W. 1039, 38 
Am. St. Rep. 690. Bee '^Infanta,** Deo. Dig. (Key-No.) | 50; Cent. Dig^ U 
114-127. 



|§ 95-97) ^ UABIUTT FOB NECESSARIES 197 

ate and serious injury to the house.*' So he is not liable on a con- 
tract of lire insurance.** While an infant is liable for a reasonable 
attorney's fee for services rendered in connection with his personal 
relief, protection, or liberty,** yet on principle and by the weight 
of authority he is not liable for services rendered by an attorney in 
connection with his property or estate.** 

Money 

. Money, as such, is not regarded as necessary. "An infant/' it was 
said in a New York case, "is not answerable for money borrowed, 
though expend<sd by him for necessaries ; nor for money borrowed 
to buy necessaries, unless it was actually so applied. And perhaps 
the infant is not answerable in that case, unless the lender either 
lays out the money himself, or sees it laid out, for necessaries. But 
where this is done the infant is answerable for the money the same 
as he would have been for the necessaries had they been directly 
furnished by the lender." *• 

•s PbUUps T. Uoyd, 18 R I. 99, 25 AtL 909; Tupper y. Cadwell, 12 Mete. 
(Masa) 559, 46 Am. Dec. 704; Wallls y. Bardwell, 126 Mass. 866; West ▼. 
Gregg's Adm*r, 1 Grant Gas. (Pa.) 53. Nor for a loan of money to pay off 
incumbranoea Bicknell ▼. Bicknell, 111 Mass. 265 ; Magee v. Welsh, 18 Cal. 
155. See ** Infants,** Dec. Dig. {Key-No.) | 50; Cent. Dig. || llk-irt. 

•»New Hampshire Mat Fire Ins. Go. y. Noyes, 32 N. H. 845. Bee "In- 
fonts;: Dec. Dig. (Key-No.) | 50; Cent. Dig, || llk-ltl. 

»4 Grafts y. Garr, 24 R. I. 897, 53 Atl. 275, 60 L. R. A. 128, 96 Ajd. St Rep. 
721 and note ; Mnnson y. Washband, 81 Gonn. 803, 88 Am. Dec. 151 ; Barker 
y. Hibbard, 54 N. H. 539, 20 Am. Rep. 160 ; Askey y. WUliams, 74 Tex. 294, 
11 S. W. 1101, 5 L. R A. 176; Gobb^ y. Buchanan, 48 Neb. 301, 67 N. W. 
176; Sutton y. Heinzle, 84 Kan. 756, 115 Pac. 560, 34 L. R. A. (N. S.) 238. 
Bee ""Infants;* Dee. Dig. {Key-No.) \ 50; Cent. Dig. K llJhI27. 

»« Bnglebert y. Troxell, '40 Neb. 195, 58 N. W. 852, 26 L. R. A, 177, 42 Am. 
St Rep. 665; Phelps v. Worcester, 11 N. H. 51; Dillon y. Bowles, 77 Mo. 
603 ; Mclsaac y. Adams, 190 Mass. 117, 76 N. E. 654, 112 Am. St Rep. 321, 
5 Ann. Gas. 729 (in which it is said, per Knowlton, G. J.: "Ordinarily rights 
of property are to be prot^ected by a guardian, and not left to the care of the 
minor himself or to the irresponsible action of third persons"). Gontra: Ep- 
person v. Nugent, 57 Miss. 45, 34 Am* Rep. 434; Searcy y. Hunter, 81 Tex. 
644, 17 Si W. 372, 26 Am. St Rep. 837. And see Owens y. Gunther, 75 Ark. 
87, 86 S. W. 851, 5 Ann. Gas. 130 and note. Bee **Infants," Deo. Dig. {Key- 
No.) S 50; Cent. Dig. If lU-127. 

»6 Randall y. Sweet, 1 Denio (N. Y.) 460. And see Kilgore y. Rich, 83 Me. 
805, 22 Ati. 176, 12 L. R. A. 859, 23 Am. St Rep. 780 ; Swift y. Bennett, 10 
Gush. (Mass.) 436; Genereux v. Sibley, 18 R. I. 43, 25 Atl. 345; Price V. San- 
ders, 60 Ind. 810; Haine*s Adm'r v. Tarrant, 2 Hill (S. G.) 400; Gonn y. Go- 
burn, 7 N. H. 368, 26 Am. Dec. 746; Beeler v. Young, 1 Bibb (Ky.) 519; 
Earle y. Peale, 1 Salk. 387. He may, howeyer, be held liable in equity for 
money borrowed and expended by him for necessaries. Price y. Sanders, 60 
Tnd. 310; Watson y. Gross, 2 Duv. (Ky.) 147; Hickman v. Hall's Adm'rs, 5 
Litt (Ky.) a38 ; Beeler y. Young, 1 Bibb (Ky.) 521. Bee "Infants,** Dec. Dig. 
(Key-No.) 8 51; Cent. Dig. | 111. 



198 CAPACITY OF PABTIE8 (Ch. 6 

Necessaries to Wife and Children 

A man is bound by law to support and care for his wife; and ati 
infant is therefore liable for necessaries furnished her.*^ And he has 
also been held liable for necessaries furnished to his child.** There 
is, however, authority for the contrary view as to children.** 

Persons Supplying Infant Act at Their Peril 

Whether things supplied to an infant were necessaries is to be de- 
termined by the infant's actual circumstances. If a tradesman sup-r 
plies expensive goods to an inftmt because he thinks that the in- 
fant's circumstances are better than they really are, or if he supplies 
goods of a useful class, not knowing that the infant is already suffi- 
ciently supplied, he does so at his peril.* 

Question of Law or Fact 

Difficulty has arisen in determining the respective provinces of 
the court and jury in ascertaining whether things supplied to an 
infant were necessaries. It is frequently stated in the American 
cases that the question whether articles come within the class of 
necessaries is for the court, and that the question whether they 
were necessaries in fact is for the jury.* In England it has been 
settled that the question whether the articles were necessaries is one 
of fact, and therefore for the jury; but that, like other questions of 

•TCantlne v. PhUllps' Adm'r, 5 Har. (Del.) 428; Price y. Sanders, 60 Ind. 
315; Chapman v. Hughes, 61 Miss. 339; Chappie t. Cooper, 13 Mees. & W. 
252, 259; Turner v. Frlsby, 1 Strange, 168; People y. Moores, 4 Denio (N. 
Y.) 520, 47 Am. Dec 272. See **Jnfant9,*' Dec. Dig. (Key-No.) S SO; Cent. 
Dig. IS 114-127. 

»8Van Valkinburgh v. Watson, 13 Johns. (N. Y) 480, 7 Am. Dec. sfe; Ex 
parte Ryder, 11 Paige (N. Y.) 185, 42 Am. Deo. 109; post, p. 645. And setf 
McConneU ▼. McConnell, 75 N. H. 385, 74 Ati. 875, holding a female In- 
fant liable for necessaries furnished herself and child. See **Infant8,'* Deo. 
Dig. (Kev-No.) | 50; Cent. Dig. SI lli-127. 

•• Kelley ▼. Davis, 49 N. H. 187, 6 Am. Rep. 499. See Tiffany, Pers. & Dom. 
Rel. 230, 269. See ^'Parent and Child*' Deo. Dig. (Key-No.) | S; Cent. Dig. 

I Brayshaw v. Eaton, 7 Scott, at page 187 ; Barnes v. Toye, 13 Q. B. Dlv. . 
410; Johnson v. Unes, 6 Watts ft S. (Pa.) 80, 40 Am. Dec. 542; Kline y. 
L'Amoureux, 2 Paige (N. Y.) 419, 22 Am. Dec. 652 ; Davis v. Caldwell, 12 Cush. 
(Mass.) 513; Rivers v. Gregg, 5 Rich. Eq. (S. C.) 274; Monumental Qldg. Ass'n 
▼. Herman, 33 Md. 131 ; Perrin v. WUson, 10 Mo. 451 ; Nicholson ▼. Spencer, 
11 Ga. 607. See **Infants,'* Deo. Dig. (Key-No.) S 50; Cent. Dig. §S 114-127. 

«Tupper ▼. Cadwell, 12 Mete. (Masa) 559, 563, 46 Am. Dec 704; Merrlam 
▼. Cunningham, 11 Cush. (Mass.) 40, 44 ; Bent v. Manninjg, 10 Vt 225 ; Stanton\ 
▼. WUlson, 3 Day (Conn.) 37, 56, 8 Am. Dec. 255; Glover v. Ott's Adm'r, 1 
McCord (S. C.) 672; Beeler v. Young, 1 Bibb (Ky.) 519; Grace v. Hale, 2 
Humph. (Tenn.) 27, 36 Am. Dec. 296; McKANNA v. MERRY, 61 111. 177, 
Throckmorton, Cas. Contracts, 135. See "Infanttf'* Deo. Dig. (Key-No.) S 102; 
Cent. Dig. S 127. 



§§ 95-97) 



LIABILITT FOB NECESSABIE8 



199 



tact, It should not be left to the jury unless there is evidence on 
which they can reasonably find in the affirmative.* Practically, 
Ihere is little difference in the two rules, for the cases' involving 
articles intrinsically incapable of being necessaries are rare, and 
the question in most cases depends on the particular circumstances. 

Express Contract for Necessaries 

The obligation of an infant to pay for necessaries being quasi 
contractual, he is liable without an express contract.* The law 
creates an obligation on his part to pay what the necessaries are 
^reasonably worth, but his express contract is voidable." If he has 
given his note or other negotiable instrument in payment, the seller 
can recover no more than the reasonable value, and on principle, in 
such a case, there can be no recove/y on the note.* In many juris- 
dictions, however, anomalously, an action may be maintained upon 
the contract, but th^real value will be inquired into, and the recov- 
ery limited to that amount.^ 

• Ryder ▼. Wombwell, L. B. 8 Exch. 83. See» also, Peters ▼. Fleming, 6 
M. & W. 42; Wharton v. Mackenzie, 5 Q. B. 606; Davis ▼. Caldwell, 12 Gush. 
(Mass.) 512, per Shaw, G. J. ; Johnson v. Lines, 6 Watts & S. (Pa.) 80, 40 Am 
Dec 542; Mohney y. 'Evans, 61 Pa. 80. Bee **Infants,^* Deo. Dig. (Key-No.) | 
102; Cent. Dig. S i«7. 

« Gay ▼. Ballon, 4 Wend. (N. Y.) 403, 21 Am. Dec. 158; Trainer ▼. TmmbuU, 
141 Mass. 530, 6 N. E. 761 ; Gregory v. Lee, 64 Gonn. 407, 30 AtL 53, 25 L. 
B. A. 618. See Keener, Quasi Contracts, 20. See "Infants,*' Deo. Dig. (Key- 
No.) I 50; Cent. Dig. H 114, 125. 

• Earle v. Reed, 10 Mete. (Mass.) 387 ; Davis v. Gay, 141 Mass. 531, 6 N. E. 
549 ; Beeler ▼. Yo\ing, 1 Bibb (Ky.) 519 ; Parsons v. Keys, 4d Tex. 557 ; Hyer 
V. Hyatt, 8 Granch, G. G. 276, Fed. Gas. No. 6,977; Dubose t. Wheddon, 4 
McGord (S. G.) 221; Locke v. Smith, 41 N. H. 346; International Text-Book 
Go. V. McKone, 133 Wis. 200, 113 N. W. 438. See "InfanU,** Deo. Dig. (Key- 
No.) 8 50; Cent. Dig. ff II4, 125. 

• Swasey r. Vanderheyden's Adm'r, 10 Johns. (N. Y.) .33 ; Fenton v. White, 
4 N. J. Law, 111 ; McMinn v. Richmonds, 6 Yerg. (Tenn.) 9 ; Bouchell v. Glary, 
3 Brev. (S. G.) 194; McGriUis v. How, 3 N. H. 348; Henderson v. Fox, 5 Ind. 
489; Morton v. Steward, 5 lU. App. 533. See "^Infanta;* Dee. Dig. (Key-No.) 
II 60, 52; Cent. Dig. I8 m, 125, 128. 

T Earle v. Reed, 10 Mete. (Mass.) 387; Bradley v. Pratt, 23 Vt 378; Dubose 
V. Wheddon, 4 McGord (S. G.) 221; Gonn v. Gobum, 7 N. H. 368, 26 Am. 
Dea 746; Aaron v. Harley, 6 Rich. Law (S. G.) 26; Askey v. Williams, 74 
Tex. 294, 11 S. W. 1101, 6 L. R. A. 176; Guthrie v. Morris, 22 Ark. 411; 
Trairer r. TrumbuU, 141 Mass. 530, 6 N. B. 76L Bee **Infanti,** Dea Dig. 
(Key-No.) | 50; Cent. Dig. |§ Hi, 125. 



2M CAPACITX OF PABTIsa (Ch. S 



SAME— RATIFICATION AND AVOIDANCE 

98^ Where the contract of an infant is voidable, he may ratify it» 
and thereby render it binding ; or he may disaffirm it^ and 
thereby render it void. 

Where the contract of an infant is voidable only, he may ratify 
it on attaining his majority, and thereby assume the rights and 
liabilities arising from it; or he may, before ratification, but not 
afterwards, disaffirm or repudiate it, and thereby escape any lia- 
bility under it. The reader will remember that such a ratification 
is an illustration of the class of cases in which a past consideration 
will support a subsequent promise.* Some contracts are valid un- 
less they are rescinded. Other contracts are invalid unless they 
are ratified. 

When DisafHrtnance Necessary 

The rule seems to be that, where an infant acquires an interest 
in permanent property, to which obligations attach, or enters into 
a contract which involves continuous rights and duties, benefits and 
liabilities, and takes benefits under the contract, he may become 
bound, unless he expressly disaffirms the contract.* 

As illustrating this rule, an infant lessee, who occupies the prem- 
ises after reaching his majority, is liable for arrears of rent which 
accrued during his minority.** Persons who have become possess- 
ed of shares in a corporation during infancy, if they hold them after 
they reach their majority, are liable for calls which accrued while 
they were infants.** An infant may become a partner, and at com- 

• Ante, p. 174. 

• Clemmer v. Price (Tex. Civ. App^) 125 S. W. 60i. Some cases declare 
that, while an Infant's exeolitory contracts are Inoperative until ratified, his 
executed contracts are good untU rescinded. Mlnock v. Shortrldge, 21 Mich. 
304 ; Bdgerly ▼. Shaw, 26 N. H. 514, 57 Am. Dea 340 ; Beardsley v. Hotchklss, 
96 N« Y. 201. But the cases are in conflict, as is shown by the different views 
entertained as to whether a Conveyance is ratified by silence and acquiescence 
after majority. Post, p. 210. On the other hand, if an infant purchases prop- 
erty and retains it for an unreasonable time after majority witiiout disaf- 
firmance, he is generally held to have ratified. Boyden v. Boyden, 9 Mete. 
(Mass.) 519; Ellis v. Alford, 64 Miss. 8, 1 South. 155; post, p. 209. Bee **Inr 
fonts,'' Deo. Dig, (Key-No.) | 57; Cent. Dig. %% 1S6-148, 151. 

10 Rolle, Abr. 731. 

11 Northwestern R. Co. v. McMlchael, 6 Exch. 114. It was said In this 
case: •'They have been treated, therefore, as persons in a different situation 
from mere contractors, for then they would have been exempt; but in truth 
they are purchasers who have acquired an interest, not in a mere chattel, but 
In a subject of a permanent nature, either by contract with the company, or 
purchase or devolution from those who have contracted, and with certain obU- 



S 98) BATIFICATIOK AKD AVOIDANCB 201 

mon law may be entitled to benefits, though not liable for debts, 
arising from the partnership during his infancy; though equity 
would not allow him to claim the benefiis without being charged 
with the losses. Unless, on attainment of majority, there is an ex- 
press rescission and disclaimer of the partnership, the infant will 
be liable for losses accruing after he became of age. By holding 
himself out as a partner he contracts a continual obligation, and 
that obligation remains until he puts an end to it by a disclaimer.^' 
And so, where shares in a corporation were assigned to an infant 
who attained his majority some months before an order was made 
for winding up the company, it was held that, in the absence of any 
disclaimer of the shares, he was liable as a contributory.* • 

When Ratification is Necessary 

The cases of which we have just been speaking, and which re- 
quire an express disclaimer to avoid the effect of the contract, arc 
all cases in which an interest was acquired in permanent property to 
which liabilities attached, or in which the contract entered into by 
the infant involved continuous rights, duties, and liabilities. If, on 
the other hand, the promise of the infant is to perform some isolat- 
ed act, or if the contract is wholly executory, it will not be binding 
on him unless he expressly ratifies it on coming of age.** As we 
have seen, if a person who has entered into a partnership during 
his minority fails to disaffirm the agreement after reaching his ma* 
jority, and so holds himself out as a partner, he will be liable for 
debts of the firm contracted after he became of age ; but he will not 
be liable for debts of the firm contracted during his minority, un- 
less he ratifies them.** Some courts hold that his ratification of the 
partnership agreement is a ratification of debts of the firm contract- 

* 
gatlons attached to It which they were bound to discharge, and have thereby 
been placed in a situation analogous to an infant purchaser of real estate, who 
has taken possession, and thereby becomes liable to all the obligations at- 
tached to the estate; for instance, to pay rent !n the case of a lease rendering 
rent, • • • unless they have elected to waive or disagree the purchase 
altogether, either during infancy or at full age, at either of which times it is 
competent for an infant to do so." See ** Infants,** Dec, Dig. {Key-No,) I 57; 
Cent, Dig. || 1S6-H8, 151. 

i3Qoode V. Harrison, 5 Bam. & Aid. 169; Miller ▼. Sims, 2 Hill (S. 0.) 
479. See ^'Infants,** Dec. Dig. (Key-No.) { 57; Cent. Dig. {{ ISS-US, 151. 

i« Lumsden's Case, 4 Ch. App. 31. See '^Infants,** Dec. Dig. (Key-yo.) { 57; 
Cent. Dig. H lSi6-148, 151. ' 

1* Whitney v. Dutch, 14 Mass, 460, 7 Am. Dec. 229; Carrell ▼. Potter, 23 
Mich. 379; Savage v. Lichlyter, 59 Ark. 1, 26 S. W. 12. See, also, post, p. 
206. Bee '•Infants,** Deo. Dig. (Key-No.) 8 57; Cent. Dig. M lSe~148, 151. 

isTobey v. Wood, 123 Mass. 88, 2S Am. Rep. 27; Todd v. Clapp, 118 Mass. 
495 ; Bush v. Linthicum, 59 Md. 344. Bee "Infants,** Dee. Dig. (Key-No.) | 57; 
Cent. Dig. H ISe^lJ^S, iSU 



202 CAPACITT or PABTIBfl (Ch. ft 

cd during his minority,** and thb would seem the proper doctrine; 
but the contrary has been held.*^ 



SAME— WHO MAY AVOID CONTRACT 

99. The privilege o£ infancy is personal to the infant, and he alone 

can take advantage of it during his life and sanity. 

100. On his death, or if he becomes insane, his contracts may be 

avoided by his heirs, personal representatives, or conserv- 
ator or guardian. 

101. The other party to the contract, not being himself under dis- 

ability, is bound if the infant chooses to hold him. 

The privilege of infancy is intended to protect the infant, and 
during his life and sanity he alone can take advantage of it.** It 
is even held that his guardian cannot avoid his contracts for him, 
though there is some dictum to the contrary.** On his death, how- 
ever, or if he becomes insane, his contracts may be avoided by his 

i« Salinas ▼. Bennett, 88 S. O. 286, 11 S. B. 968 ; Mmer v. Sims, 2 Hill (S. 
a) 479. See **Infanta," Dec. Dig. (Key-No.) | 57; Cent. Dig. |{ 136-148, 151. 

IT Mehlhop V. Rae, 90 Iowa, 30, 57 N. W. 650; Crabtree v. May, 1 B. Mon. 
(Ky.) 289; Mlnock y. Shortridge, 21 Mich. 804. And see cases cited In note 
15, supra. See **InfarUs,** Dec. Dig. (Key-No.) ( 57; Cent. Dig. || IS&-I48, 
151. 

i«Keane ▼. Boycott, 2 H. Bl. 511, EweU's Cas» 17; Holt ▼. Ward Clar- 
endeuz, 2 Strange, 937; Nightingale v. Withington, 15 Mass. 272, $ Am. Dec. 
101 ; MANSFIELD v. GORDON, 144 Mass. 168, 10 N. E. 773, Throckmorton, 
Caa. Ck>ntract8, 137; Harris v. Ross, 112 Ind. 814, 13 N. E. 873; Hartness 
r. Thompson, 5 Johns. (N. T.) 160; Beardsley ▼. Hotchkiss, 96 N. Y. 201; 
Baldwin v. Rosier (O. C.) 48 Fed. 810; Hooper ▼. Payne, 94 Ala. 223, 10 
South. 431 ; Chambers r. Ker, 6 Tex. Cir. App. 373, 24 S. W. 1118 ; Dentler ▼. 
O'Brien, 56 Ark. 49, 19 S. W* 111; Holmes v. Rice, 45 Mich. 142. 7 K. W. 
772; Garner ▼. Cool^ 80 Ind. 331 ; Oliver y. Houdlet, 13 Mas& 237, 7 Am. Dec 
134; Van Bramer y. Cooper, 2 Johns. (N. Y.) 279; Alsworth y. Cordtz, 81 
Miss. 32. In an action, for instance, for enticing away a servant from plain- 
tiff's service, the defendant cannot escape liability by showing that the serv- 
ant was an infant, and was therefore not bound by his contract with the' 
plaintiff. Keane v. Boycott, supra. The surety on a bond given by an Infant, 
and afterwards disaffirmed by him, has been held liable. Kyger ▼. Slpe, 89 
Va. 507, 16 S. B. 627. See "^Infante;* Deo. Dig. {Key-No.) | 68; Cent. Dig. 
1 150. 

!• See Oliver ▼. Houdlet, 13 Mass. 240, 7 Am. Dea 134 ; Irvine's Heirs ▼. 
Crockett, 4 Bibb (Ky.) ^37; Chandler v. Simmons, 97 Mass. 508, 93 Am. Dec 
117; Of. Stafford r. Roof, 9 Cow. (N. Y.) 626; post, p. 205. See "Infante, 
Dec Dig. (Key-No.) | 58; Cent. Dig. | 150. 



ft 



§§ 9&-101) WHO u'ay avoid contkact 203 

heirs,*^ his personal representatives,** or his guardian or conserva- 
tor.** The reason of the rule, it has been said, extends only to 
them because the privilege is conferred for his sole benefit. While 
living, he should be the exclusive judge of that benefit, and when 
dead those alone should interfere who legally represent him. Could 
his contracts be avoided by third persons, tl^e principle would oper- 
ate, not for his, but for their, benefit; not when he chose to avail 
himself of his privileges, but when strangers elected to do it.** 

The other party to the contract, not being himself under a disa- 
bility to contract, cannot avoid it. He is bound if the infant choos- 
es to hold him by ratifying the contract on becoming of age.** A 
court of equity, however, will not grant an infant specific perform- 
ance of a contract by th^ aduft.** Of course, those contracts which 
are held void, and not merely voidable, at the infant's option, are 
of no effect at all, and can bind neither party. 

<• Illinois Land & Loan Co. r. Bonner, 75 IlL 815; Harvey r. Briggs, 68 
Miss. 60, 8 South. 274, 10 L. XL A. 62; Searcy ▼. Hunter, 81 Tez. 644, 17 S. 
W. 372, 26 Am. St Rep. 837; Veal v. Fortson, 57 Tex. 487; Ferguson t. BeU's 
Adm'r, 17 Mo. 851; Levering y. Heighe, 2 Md. Ch. 81, 88; Breckenridge's 
Helm ▼. Ormsby, 1 J. J. Marsh. (Ky.) 248, 19 Am. Dec. 71« Bee **Infant9,^' 
Dec. Dig, {Key-No.) | 58; Cent, Dig, % 160. 

SI Parsons v. HiU, 8 Mo. 135; Hastings v. Dollarhld^ 24 CaL'207; Person 
▼. Chase, 87 Vt 650, 88 Am. Dec 630; Jefford's Adm'r v. Ringgold, 6 Ala. 547; 
Hussey v. Jewett, 9 Mass. 100; Smith y. Mayo, 9 Mass. 62, 6 Am. Dea 28; 
Breckenridge's Heirs v. Ormsby, 1 J. J. Marsh. (Ky.) 248, 19 Am. Dec. 71. 
See **Infants,'* Deo, Dig, (Key-No,) | 58; Cent. Dig, S 150, 

ts Chandler ▼. Simmons, 97 Mass. 508, 93 Am.* Dea 117. Bee "Infants,** 
Deo. Dig, {Key-No.) | 58; Cent. Dig, f 150. 

«• MANSFIELD v. GORDON, 144 Mass. 168, 10 N. B. 773, Throckmorton, 
Gas. Contracts, 187. Though ordinarily a plea of infancy is personal, a 
beneficiary In a policy on the Infant's life may plead it In answer to the 
company's defense of false warranties in the application; for otherwise an 
infant's contract of Insurance would be in effect binding on him during his 
minority. O'Rourke ▼. John Hancock Mut Life Ins. Co.', 23 R. I. 457, 50 
AU. 834, 57 L; R. A. 496, 91 Am. St Rep. 643. Bee **InfanU;* Deo. Dig, {Key- 
No.) |v58; Cent. Dig. $ 150, 

t^Holt ▼. Ward Clarencieux, 2 Strange, 937; Thompson r. Hamilton, 12 
Pick. (Mass.) 425, 23 Am. Dec. 619; Hunt ▼. Peake, 5 Cow. (N. Y.) 475, 15 
Am. Dec 475 ; Field y. Herrick, 101 IlL 110. Bee ^^Infants,** Deo. Dig. {Key- 
Vo.) n 47, 58; Cent. Dig. f 150, 

«» Flight v. Bolland, 4 Russ. 29& See ^'Infants,** Deo. Dig, {Key-No.) | 58; 
Cent. Dig. | 150. 



204 CAPACITT or PABTIB8 (Ch. S 



SAME— TIME OF AVOIDANCE 

102. Executory contracts, or executed contracts relating to person* 

alty, may be avoided by an infant either before or after at- 
taining his majority; but conveyances of land caxmot be 
disaffirmed during minority, though he may enter and take 
the profits. "^ 

103. As a rule, mere lapse of time after attaining his majority will 

not bar an infant's disaffirmance of his executory contract, 
but in a few states he is required to disaffirm within a rea- 
sonable time. 

104. As a rule, executed contracts must be disaffirmed within a 

reasonable time after attaining majority; but in some 
states it is held that the right to avoid a conveyance of 
land is not barred by acquiescence for any period short of 
that prescribed by the statute of limitations. 

An infant's executory contract may be avoided by him at any 
time, either' before or after attaining his majority, by refusing to 
perform it; and pleading his infancy when sued for breach of the 
contract. •• / 

In the case of executed contracts a distinction is made between 
contracts relating to his land and those relating to his personalty. 
A deed of land executed by an infant cannot be disaffirmed during 
his minority. He may enter on the land and take the profits until 
the time arrives when he has the legal capacity to affirm or disaf- 
firm the deed ; but the deed is not rendered void by the entry. It 
may still be affirmed after he reaches his majority.*^ 

>« Reeves, Dom. Rel. 2S4; RIOB ▼. BOYER, 108 Ind. 472, 9 N. B. 420. 5S 
Am. Rep. 53, Throckmorton, Cas. Contracts, 143; Adams t. Beall, 67 Md. 
53, 8 Atl. 664, 1 Am. St Rep. 379; I^oss P. Curtice Co. t. Kent, 89 Neb. 496, 
131 N. W. 944. An Infant may avoid his contracts for personal ser\ice8 durinsr 
hl8 minority. Vent v. Osgood, 19 Pick. (Mass.) 572; Ray v. Haines, 62 111. 
485; Adams v. Beall, 67 Md. 53, 8 Atl. 664, 1 Am. St Rep. 379; Gaffney v. 
Hayden, 110 Mass. 137, 14 Am. Rep. 680; Vehue v. Pinkham, 60 Me. 142; 
Whitmarsh v. Hall, 8 Denlo (N. Y.) 375. See "^Infants," t)ec. Dig. {Key-Ko.) 
I 58; Cent, Dig. || U9^160. 

«T Welch v. Bunce, 83 Ind. 382; Zonch v. Parsons, 3 Burrows, 1794; Irvine 
V. Irvine, 5 Minn. 61 (Gil. 44); Hastings v. Dollarhide, 24 Gal. 195; Bool v. 
Mix, 17 Wend. (N. Y.) 119, 31 AnL Dec. 285; McCormlc v. Leggett, 63 N. a 
425 ; Stafford ▼. Roof, 9 Cow. (N. Y.) 626 ; Baker v. Kennett, 54 Mo. 8& An 
infant, however, may, before attaining his majority, plead infancy in a suit 
to foreclose a mortgage on land. Schneider v. Stalhr, 20 Mo. 269. See ^In- 
tents,** Deo. Dig. (Key-No.) | SI; Cent. Dig. H 41, 46, 50^S. 



\ 

§g 103-104) TIME OF AVOIDANCB 205 

■ 

The rule, however, does not apply to a sale and manual delivery 
of chattels by an infant. Such a contract may be avoided by him 
while he is still an infant.** In a New York case it was said : "The 
general rule is that an infant cannot avoid his contract, executed 
by himself, and which is therefore voidable only, while he is 
within age. He lacks legal discretion to do the act of avoidance. 
But this rule must be taken with the distinction that the delay shall 
not work unavoidable prejudice to the infant, or the object of his 
privilege, which is intended for his protection, would not be an- 
swered. When applied to a sale of his property, it must be his 
land ; a case in which he may enter and receive the profits until the 
power of finally avoiding shall arrive. * * * Should the law 
extend the same doctrine to sales of his personal estate, it would 
evidently expose him to great loss in many cases, and we shall act 
up to the principle of protection much more effectually by allowing 
him to. rescind while under age, though he may sometimes mis- 
judge, and avoid a contract which is for his own benefit. The true 
rule, then, appears to me to be that, where the infant can enter and 
hold the subject of the sale till his legal age, he shall be incapable 
of avoiding till that time ; but where the possession is changed, and 
there is no iegal means to regain and hold it in the meantime, the 
infant, or his guardian for him, has the right to exercise the power 
of rescission immediately." *• 

The rule is very general, almost universal, that an infant may 
avoid any contract in relation to his personal property before he is 
of age.*® Some courts have held that he cannot disaffirm a part- 
nership agreement during his minority, so as to recover what he has 

•• Stafford t. Roof, Cow. (N. T.) e26 ; Bool ▼. Mix, 17 Wend. (N. T.) 119. 
31 Am. Dec. 285; Zouch v. Parsons, 3 Burrows, 1794; Adams v. BeaU, 67 Md. 
03, 8 AtL 604, 1 Am. St Rep. 379; Shlpman y. Horton, 17 Conn. 481; Riiey 
▼. Mallory, 33 Conn. 207; Willis ▼. Twambly, 13 Mass. 204; Carr y. Clough, 

26 N. H. 280, 59 Am. Dec 845; Chapln y. Shafer, 49 N. Y. 407; Towle v. 
Dresser, 73 Me. 252; Hoyt y. Wilkinson, 57 Vt 404; Carpenter y. Carpenter, 
45 Ind. 142; Cogley y. Cushman, 16 Minn. 397 (611. 354); Price y. Furman, 

27 Vt 268^ 65 Am. Dec 194. Bee '*lnfanU;* Deo. Dig, (Key-No.) | 58; Cent. 
Dig. n H9'160. 

>• Stafford y. Roof, supra. Bee **Infanta," Dec, Dig. {Key-No.) | 3i; Cent. 

•0 See Shirk y. Shultz, 113 Ind. 571, 15 N. B. 12 (collecting cases) ; RICE 
y/ BOYER, 108 Ind. 472, 9 N. B. 420, 58 Am. Rep. 53, Throckmorton, Cas. 
Contracts, 143; Hoyt y. Wilkinson, 57 Vt 404; Price r. Furman, 27 Vt 268, 
65 Am. Dec 194; Willis y. Twambly, 13 Mass. 204; Stafford y. Roof, 9 Cow. 
(N. Y.) 628; Bool y. Mix, 17 Wend. (N. Y.) 119. 31 Am. Dec 285; Petrie y. 
Williams, 68 Hun, 589, 23 N. Y. Supp. 237 ; Cogley v. Cushman, 16 Minn. 397 
(GIL 854) ; Wuller y. Chuse Grocery Co., 241 111. 398, 89 N. B. 796, 28 L. R. 
A. (N. S.) 128, 132 Am. St Rep. 216^ 16 Ann. Gas. 522. Contsa: Lanstng 



206 CAPACITY OF PARTIES (Ch. 6 

put into the firm but must wait until he attains his majority.'^ 
Other courts hold the contrary, on the ground that it is a contract 
in relation to his personalty, and that all contracts of an infant in 
relation to personal property may be disaffirmed during his minor- 
ity." 

As to whether a contract must be disaffirmed by an infant with- 
in a reasonable time after he attains his majority, the authorities 
are conflicting. In the case of executory contracts requiring rati- 
fication to render them .binding, the right to avoid them cannot be 
barred by mere silence, without more. It may be otherwise where 
the circumstances are such as to make it the infant's duty te speak, 
for in such a case silence or acquiescence may amount to a ratifica- 
tion." 

In the case of conveyances of land, sales and delivery of chattels, 
and the like, many courts hold 4:hat the infant must disaffirm the 
contract within a reasonable time after he attains his majority, or 
be held to have ratified it, and to be barred from avoiding it."* 
Many courts, however, have held that a conveyan<:e of land by an 
infant need not be disaffirmed within any period short of that pre- 
scribed by the statute of limitations, and that acquiescence for any 
shorter time will not bar his right to avoid it*" 

V. Railroad Co., 126 Mich. 663, 86 N. W. 147, 86 Am. St Rep. 667. And see 
Plppen V. Insurance Co., 130 N. (X 23, 40 S. B. 822, 57 L. R. A. 505. See 
^'Infants;* Dec. Dig. (Key-No.) S 68; Cent. Dig. §§ 149-160. 

siDunton t. Brown, 81 Mich. 182; Annitage v. Widoe, 36 Mich. 130; Bush 
▼. Linthicum, 59 Md. 344 (but see Adams ▼. BeaU, 67 Md. 53, 8 AtL 664, 1 
Am. St Rep. 879). ^Bee **InfanU;* Deo. Dig. {Key-No.) | 58; Cent. Dig. §§ 
U9-160. 

s2 Shirk V. Shultz, 113 Tnd. 571, 15 N. E. 12 (collecting cases) ; Adams ▼. 
Beall, 67 Md. 53, 8 Atl. 664, 1 Am. St Rep. 879. See *'InfanU,** Deo. Dig. 
(Key-No.) { 58; Cent. Dig. §{ H9-160. 

" Ante, p. 201 ; post, p. 210. 

1* Delano ▼. Blake, 11 Wend. (N. Y.) 85, 25 Am. Dec. 617; (Joodnow ▼. 
Empire Lumber Co., 31 Minn. 468, 18 N. W. 283, 47 Am. Rep. 798 (collecting 
the cases pro and con); Blgelow y. Kinney, 3 Vt 353, 21 Am. Dec. 589; 
Dolph y. Hand, 156 Pa. 91, 27 Atl. 114, 36 Am. St Rep. 25 ; Amey y. Cockey, 
73 Md. 297, 20 AtL 1071 ; Ihley y. Padgett 27 S. C. 300, 3 S. E. 468 ; Sanders 
y. Bennett (Ky.) 1 S. W. 436; Scott y. Buchanan, 11 Humph. (Tenn.) 468; 
Aldrlch y. Funk. 48 Hun, 367, 1 N. T. Supp. 543 ; Ward y. Layerty, 19 Neb. 
429, 27 N. W. 393 ; Thormaehlen y. Kaeppel, 86 Wis. 378, 56 N. W. 1089 ; Kline 
•y. Beebe,' 6 CJonn. 506; Clemmer v. Price (Tex. Cly. App.) 125 S. W. 604 (con- 
yeyance of land to Infant). An infant's delay of less than six months after 
majority in avoiding a deed of land, with knowledge that purchasers from 
his grantee are making improvements, does not estop him. Bundle v. Spencer, 
67 Mich. 189, 84 N. W. 548. See ''Infanta** Deo. Dig. (Key-No.) H SI, 58; 
Cent. Dig. {§ ^i, 46, 50-63, 149-160. 

as Drake's Lessees y. Ramsay, 6 Ohio, 261 ; Prout v. Wiley, 28 Mich. 164 ; 
Lacy T. Pizler, 120 Mo. 883, 25 S. W. 206 ; Sims y. Everhardt 102 U. S. 300, 



g§ 105-107) WHAT AMOUNTS TO RATEBTCATION 207 

It is provided by statute in some states that an infant is bound on 
all his contracts unless he disaffirms them within a reasonable 
time.** 

SAME— WHAT AMOUNTS TO RATIFICATION 

105. In some jurisdictions, by statute, ratification of a contract by 

an infant must, subject to specified exceptions, be in writ- 
ing, signed by him or his agent ' 

106. In the absence of such a provision, ratification may be by an 

express new promise, orally or in writing; or it may be 
implied from declarations or conduct clearly showing an 
intention to be bound. 

107. The promise must be made or the acts done by the infant 

understanding^, but the cases are in conflict as to wheth- 
er knowledge of the legal right to avoid the contract is 
necessary. 

Writing Required by Statute 

In some jurisdictions it is declared by statute that, with specified 
exceptions, no action shall be maintained on any contract made by 
an infant, unless he, or some person lawfully authorized, has rati- 
fied it in writing after he attained his majority.*^ No particular 
form of words is required by the statute to make a confirmation 
of a debt contracted by a person when an infant, and they need not 
amount to a direct promise to p^y, but they must import an un- 
equivocal recognition and confirmation of the previous engage- 
men t.** 

26 li. Ed. 87; Wells t. Seixas (0. C.) 24 Fed. 82; Richardson t. Pate, 93 Ind. 
423, 47 Am. Rep. 374; Green v. Green, 69 N. Y. 553, 25 Am. Rep. 233; Eagan 
T. Scnlly, 29 App. Div. 617, 51 N. Y. Supp. 680, affirmed 173 N. Y. 581, 65 
N. E. 1116; Shlpp y. McKee, 80 Miss. 741, 81 South. 197, 82 South. 281, 92 
Am. St Rep. 616. Bee "Infants,'' Deo. Dig. (JTey-^o.) § 91; Cent. Dig. §§ 54, 55. 

•• Leacox t. Griffith, 76 Iowa, 89, 40 N. W. 109; Mehlhop y. Rae, 90 Iowa, 
80, 57 N. W. 650 ; flegler v. Faulkner, 153 U. S. 109, 14 Sup. Ct 779, 38 L. 
Ed. 653 (under Nebraska statute); Johnson y. Storle, 32 Neb. 610, 49 N. W. 
371. See **Infants," Dec. Dig. (Key-No.) { SI; Cent. Dig. {§ 54, 55. 

•r Ward y. Scherer, 96 Va. 318, 31 S. E. 518; Bird y. Swain, 79 Me. 529, 11 
AtL 421. In the absence of such ratification in writing, the sale by an infant, 
after coming of age, of merchandise bought by him on credit during his 
minority, does not render him liable for its purchase price, either in tort or 
contract Lamkin & Foster y. Le Doux, 101 Me. 581, 64 Atl. 1048, 8 Lu R. A. 
(N. S.) 104. See "Infants," Dec. Dig. (Key-No.) § 57; Cent. Dig. § 1S9. 

•t Ward y. Scherer, 96 Va. 318» 31 S. B. 5ia See "InfanU,** Dee. Dig. {Key- 
Vo.) i 57; Cent. Dig. H ISS-HS. 



208 CAPACITY OF PABTIA8 (Ch. € 

Where No Statutory Requirement 

In the absence of such a statutory provision, ratification may 
either be by an express new promise, made orally or in writing, 
or it may be implied from acts or declarations clearly showing 
an intention to recognize the contract, and to be bound by it. 
The new promise, whether in writing or oral, or evidenced by con- 
duct, must be clear and unequivocal, and must show an intention 
to be bound.** 

A mere acknowledgment of the contract, without a promise to 
be bound, express or implied, is not sufficient.** Where there is 
a new promise, it must be made to the other party or his agent; ** 
and if it is not absolute, but conditional — ^as, for instance, where 
it is a promise to pay or otherwise perform when able — the condi- 
tion must be fulfilled before any liability attaches.** 

It has frequently been held that to render an act or promise 
binding as a latiiication it must be performed or made with knowl- 
edge that there was in law no liability on the original contraict.** 
There are many cases, however, which hold that knowledge of the 
law is not necessary, or, rattier, must be presumed.** 

There need be no fresh consideration for the new promise, for, 

••Whitney t. Dutch, 14 Mass., at page 460, 7 Am. Dec. 229; Oarrell t. 
Potter, 23 Bilch. 370. And see uotes 40-51, infra. See **lnfant$,'* Deo. Dig, 
{Key-No.) I 57; Cent. Dig. IS It&'UB. 

40 THOMPSON y. LAY, 4 Pick. (Mass.) 48, 16 Am. Dec. 325, Throekmortoa 
Gas. Contracts, 139 ; Ford y. PhUlips, 1 Pick. (Mass.) 202 ; Kendrick y. Nelsi^ 
17 Colo. 606, 30 Pac. 245 ; Hale v. Gerrish, 8 N. H. 374. See "Infant9,'* Dec. 
Dig. (Key-No.) | 57; Cent. Dig. fS JS6-i48. 

«iGoodsell y. Myers, 3 Wend. (N. Y.) 479; Bigelow y. Grannis, 2 Hill (N. 
Y.) 120. See **Infant$;* Dec. Dig. (Key-No.) | 57; Cent. Dig. fS ISO-US. 

4SEyerson y. Carpenter, 17 Wend. (N. Y.) 419; Kendrick y. Neisz, 17 Colo. 
506, 80 Pac. 245 ; THOMPSON y. LAY, 4 Pick. (Mass.) 48. 16 Am. Dea 325, 
Throckmorton Cas. Contracts^ 139; Proctor y. Sears, 4 Allen (Mass.) 95. See 
'•Infants," Dec. Dig. (Key-No.) § 57; Cent. Dig. U 196-U8. 

*« Hamer y. Killing, 5 ESp. 103; (Durtin y. Patton, 11 Serg. & R. (Pa.) 805; 
Thing y. Libbey, 16 Me. 55; Trader y. Lowe, 45 Md. 1; Smith y. Mayo, 9 
Mass. 62, 6 Am. Dec. 28; Ford y, Phillips, 1 Pick. (Mass.) 202; Reed y. 
Boshears, 4 Sneed (Tenn.) 118 ; Norris y. Vance, 3 Rich. Law (S. O.) 164 ; Bur* 
dett y. Williams (D. C.) 30 Fed. 607; Bresee v. Stanly, 119 N. O. 278, 25 S. 
13. 870. No ratification, if adult is ignorant that he was an infant when 
he made the contract Ridge way y. Herbert, 150 Mo. 606, 51 S. W. 1040, 73 
Am. St Rep. 464. See "Infants;* Deo. Dig. (Key-No.) § 57; Cent. Dig. §{ 

ise-us. 

«4 Morse y. Wheeler, 4 Allen (Mass.) 570; Taft y. Sergeant, 18 Barb. (N. Y.) 
321; Anderson y. Soward, 40 Ohio St 325, 48 Am. Rep. 687; American Mortr 
gage (>). of Scotland y. Wright, 101 Ala. 658. 14 South. 399; CHark y. Van 
Court, 100 Ind. 113, 50 Am. Rep. 774; Ring y. Jamison, 60 Mo. 424; Bestor 
y. Hickey, 71 Conn. 181, 41 AtL 555. Bee "Infants," Dec. Dig. (Key-No.) i 57; 
Cent Dig. » 1S6-U8. 



S§ 105-107, WHAT AMOUNTS TO BATIFIGATION 209 

as we have seen, this is one of the cases in which a past consid- 
eration is sufficient.** 

Same— Implied Ratification 

Unless a statute so requires, an express promise in terms is not 
necessary in order to constitute ratification of an obligation incur- 
red during infancy. "Where the declarations or acts of the indi- 
vidual after becoming of age/' said the Vermont court, "fairly and 
justly lead to the inference that he intended to and did recognize 
and ^dopt as binding an agreement executory on his part, made 
during infancy, and intended to pay the debt then incurred, we 
think it is sufficient to constitute ratification, provided the declara- 
tions were freely and understandingly made, or the acts in like 
manner performed, and with knowledge that he was not legally 
liable." *• 

The courts go much further than this„ and hold substantially 
that any intelligent conduct by a person, after attaining his ma- 
jority, inconsistent with the nonexistence of a contract, executory 
or executed, will, as a rule, amount to an affirmance of the con- 
tract.*' If, for instance, an infant takes a lease, and after becoming 
of age recognizes it by occupying under it, or if, having given a 
lease, he accepts rent after becoming of age, his conduct amounts 
to a ratification.** So, also, a purchase of land or chattels by an 
infant is ratified if he retains and uses the property for an unrea- 
sonable time after attaining his majority, or if he sells it to a third 
person, or otherwise disposes of it** The receipt of, or a suit to^ 

45 Ante, p. 174. 

4« Hatch ▼. Hatc^*s Estate, 60 Vt IGO, 13 Atl. 791. And see Kendrick v. 
Neisz, 17 Colo. 506, 80 Pac. 245 ; Baker y. Kennett, 54 Mo. 88 ; Wbeaton ▼. 
East, 5 Terg. (Tenn.) 41, 26 Am. Dec. 251 ; Emmons y. Murray, 16 N. H. 385 ; 
Drake v. Wise, 36 Iowa, 476; Hale v. Gerrish, 8 N. H. 874; Mlddleton v. 
Hoge, 5 Bush (Ky.) 478 (collecting cases) ; Barlow v. Robinson, 174 111. 317, 51 
N. E. 1045. See Ewell, Lead. Cas. 173-180. See ''Infanta;* Deo, Dig. (Key- 
Vo.) S 57; Cent. Dig. §8 ISG-HS. 

47 Henry v. Root, 33 N. Y. 526 (collecting cases). Where an infant buys 
land, and gives a mortgage to secure the purchase money, a sale and con- 
veyance of the land after he becomes of age is a ratification of the mort- 
gage. Uecker v. Koehn, 21 Neb. 550, 32 N. W. 583, 59 Am. Rep. 849. And see 
Callis v. Day, 38 Wis. 643. Acceptance of part of the proceeds of a sale un- 
der a deed of trust given while an infant Darraugh ▼. Blackford; 84 Va. 
509, 5 S. B. 542. Taking releases of part of premises mortgaged during in- 
fancy, and acquiescence for two years. WUson v. Darragh, 55 Hun, 605, 7 
N. Y. Supp. 810. Bee ''Infanta;* Deo. Dig. (Key No.) §§ SO, 57; Cent. Dig. 
fl 41-^5, 1S6-148. 

«s Ashfleld ▼. Ashfleld, W. Jones, 157; Paramour v. Yardley, Plowd. 546. 
See "Infants;* Dec. Dig. (/Tej/.Vo.) H 50, 57; Cent. Dig. {§ 41-65. JS€^U8. 

«^ Uenry v. Root, 33 N. Y. 526; LAWson v. Love joy, 8 Greenl. (Me.) 405, 23 

CiABK Cont.(3d Ed.) — 14 



210 CAPACITY OF PARTIES (Ch. 6 

recover, the purchase money of property sold by him, or suit to 
enforce any other kind of contract, would amount to a ratification 
of the contract/* Generally speaking, the act relied upon as a 
ratification must show an intention to affirm the contract ; but the 
decisions are not in accord as to what acts are sufficient to show 
such an intention. Disposing of the property received under the 
contract, and the other acts above mentioned, would clearly show 
such intention; but where an infant has executed a conveyance, 
a mere offer, after attaining his majority, to execute a confirm- 
atory deed if the other party will pay the balance of the purchase 
money, which oflFer is refused, clearly could not be regarded as 
a ratification of the sale and conveyance.** 

Mere silence or acquiescence after becoming of age, without 

Am. Dec. 526 ; Boyden ▼. Boyden, Mete. (Mass.) 619 ; Robblns y. Eaton, 10 N. 
H. 561 ;' Hubbard y. Cummings, 1 Greenl. (Me.) 11 ; Boody y. McKenney, 23 
Me. 517 ; EUis y. Alford, 64 Miss. 8» 1 South. 155 ; Buchanan v. Hubbard, 119 
Ind. 187, 21 N. B. 538; Cheshire y. Barrett, 4 McGord (S. O.) 241, 17 Am. 
Dec. 735; Deason y. Boyd, 1 Dana (Ky.) 45; Shropshire y. Bums, 46 Ala. 108; 
Aldrlch y. Grimes, 10 N. H. 194; Dana y. Coombs, 6 Greenl. (Me.) 89, 19 
Am. Dec. 194; Armfleld y. Tate, 29 N. C. 258; Callis y. Day, 88 Wis. 643; 
Hilton y. Shepherd, 92 Me. 160, 42 Atl. 387. 'This is expressly declared by 
statute in some states. See McKamy y. Cooper, 81 Ga. 679, 8 S. E. 312. Re- 
taining property after tendering it on disaffirmance, and on the other's re- 
fusal to receiye it, is not a ratification. House y. Alexander, 105 Ind. 109, 
4 N. E. 891, 55 Am. Rep. 189. And see Scott y. Scott, 29 S. a 414, 7 S. E. 811. 
The retention by a person, after becoming of age, of material furnished him 
during his minority in the construction of his house^ is not a ratification of 
his purchase of the material, for he cannot return it Bloomer y. Nolan, 36 
Neb. 51, 53 N. W. 1039, 38 Am. St Rep. 690. See ''Infants;* Dec. Dig. {Key- 
No.) §1 SO, 57; Cent. Dig. {{ 4^^$, 1S6-148. 

80 Morrill y. Aden, 19 Vt 505; Ferguso«i y. BelFs Adm'r, 17 Mo. 347; Purs- 
ley y. Hays, 17 Iowa, 310. Where an infant takes a deed and giyes back a - 
purchase-money mortgage, and the property is sold under the mortgage, the 
infant after his majority, by bringing ejectment against the purchaser, not 
only affirms the deed, but the mortgage. Kennedy y. Baker, 159 Pa. 146, 28 
Atl. 252w See ^'Infants," Dec. Dig. (Key-No.) f§ SO, 57; Cent. Dig. II 41-55, 
1S6-U8. 

Bi Craig y. Van Bebber, 100 Mo. 584, IS S. W. 906, 18 Am. St Rep. 669. 
When a note b^ an Infant remains in part unpaid, mere acknowledgment of 
the debt, or payment of interest or part of principal, after becoming of age, 
is not a binding affirmance. Kendrick y. Neisz, 17 Colo. 506, 30 Pac. 245. 
Contra, American Mortgage Co. of Scotland y. Wright, 101 Ala. 658, 14 South. . 
399. So, where land has been purchased, and installment notes giyen by aca 
infant, payment of some after becoming of age is not of itself a ratification. 
Rapid Transit Land Co. y. Sanford (Tex. Civ. App.) 24 S. W. 587. The re- 
cital in a mortgage executed after attaining majority, that it is subject to 
a mortgage executed during infancy, is a ratification of the prior mortgage. 
Waid y. Anderson, 111 N. C. 115, 15 S. B. 933. Bee ''Infants," Dec Dig. 
iKey-No.) fi§ SO, 57 ; Cent. Dig. ^ 41-55, 1S6-1A8. 



g 108) WHAT AMOUNTS TO DI8AFFIBMAN01B 211 

more, docs not, as a rule, amount to a ratification."* It is other- 
wise where the contract is one which requires disaffirmance, and 
there is a failure to disaffirm for an unreasonable time, under 
such circumstances as to lead others to act to tlieir prejudice."* 



SAMEJ— WHAT AMOUNTS TO DISAFFIRMANCE 






108. A contract is disaffirmed by any conduct which is inconsist- / 
ent with the existence of the contract, and shows aiy 
intention not to be bound by it. 




Disaffirmance, like ratification, may be implied, and 
generally be implied from conduct clearly inconsistent with the 
existence of the contract."* Where, for instance, a person who 
has sold and conveyed or mortgaged land or goods while an infant, 
sells, leases, or mortgages the same to another after becoming of 
age, this is a disaffirmance of his contract."" An action by a per- 
son, after becoming of age, to recover goods or land sold by him 

•« Dnrfee t. Abbott, 61 Mich. 471. 68 N. W. 521 ; Irvine v. Irvliie, 9 Wall. 
618, 19 L. Ed. 800; Tyler y. Fleming, 68 Mich. 185, 85 N. W. 902, 13 Am. St. 
Rep. 336 ; Hill y. Nelms, 86 Ala. 442, 5 South. 79a But see Delano y. Blake. 
11 Wend. (N. Y.) 85, 25 Am. Dec. 617; ante, p. 206. See *' Infants;* Dec, 
Diff. (Key-No.) i 57; Cent. Dig. §§ 136^148. 

B«Langdon y. Glayson, 75 Mich. 204, 42 N. W. 806; Lacy y. Plzler, 120 
Mo. 883, 25 S. W. 206; Dolph v. Hand, 156 Pa. 91. 27 AtL 114, 36 Am. St 
Rep. 25; Wheaton y. East^ 6 Yerg. (Tenn.) 41, 62, 26 Am. Dec 268; Har^ 
man y. Kendall, 4 Ind. 403 ; WaUace's Lessee y. Lewis, 4 Har. (Del) 80. See 
"Infants,'' Deo. Dig. (Key-Vo.) % 57; Cent. Dig. \% 1S6^U8. 

»* Pyne y. Wood, 145 Mass. 658, 14 N. B. 775 ; Vent y. Osgood, 19 Pick. 
(Mass.) 572; Whltmarsh y. Hall, 3 Denlo (N. Y.) 375; Dallas y. HolUngsworth, 
3 Ind. 537. See **InfanU;' Deo. Dig. (Key-No.) §| 31, 58; Cent. Dig. fj 41-63, 
149^160. 

••Tuckw y. Moretand, 10 Pet 58, 9 L. Ed. 345; Mustard y. Wohlford's 
Heirs, 15 Grat (Va.) 329, 76 Am. Dec. 209; Vallandlngham y. Johnson, 85 
Ky. 288, 3 S. W. 173 ; Corbett y. Spencer, 63 Mich. 731, 30 N. W. 385 ; Haynes y. 
Bennett, 53 Mich. 15, 18 N. W. 539; Dawson y. Helmes, 30 Minn. 107, 14 N. 
W. 462; Chapln y. Shafer, 49 N. Y. 407; Peterson y. Lalk, 24 Mo. 541, 69 
Am. Dec 441 ; Cresliiger y. Welch's Lessee, 15 Ohio, 156, 45 Am. Dec. 5G5 ; 
Pitcher y. Layrock, 7 Ind. 398; McGan y. Marshall, 7 Humph. (Tenn.) 121; 
Rldgeway y. Herbert, 150 Mo. 606, 51 S. W. 1040, 73 Amu St Rep. 464. In 
some jurisdictions a person Is not allowed to conyey land which is in the 
adverse possession of another. Here, therefore, an infant cannot ayoid his 
deed of land by a second deed, executed while his first grantee or another 
is in the adverse possession of the land. He must first make an entry. Har- 
rison V. Adcock, 8 Ga. 68. See Bool y. Mix, 17 Wend. (N. Y.) 133, 31 Am. 
Dec. 285. Bee ''Infants," Dec. Dig. (Key-No.) f§ 31, 58; Cent. Dig. fj 41^-63, 
149^160. 



212 CAPACITT or PARTIES (Ch. 6 

during his minority, is a disaffirmance of the sale;'* and a con- 
tract is disaffirmed by merely pleading infancy when suit is 
brought against him to enforce it. 

At one time disaffirmance of a deed of land was required to be 
by some act as high and solemn as the deed ; but, according to 
the weight of authority, this solemnity is no longer necessary, 
and a deed may be eflfectually avoided by any acts or declarations 
disclosing an unequivocal intent to repudiate it*' 



SAME— EXTENT OF RATIFICATION OR DISAFFIRM- , 

ANCE 

109. The ratification or disaffirmance must be in toto. The con- 
tract cannot be ratified or disaffirmed in part only. 

The disaffirmance or ratification must go to the whole contract 
An infant cannot ratify a part which he deems for his benefit, 
and repudiate the rest.** He cannot, for instance, ratify a lease 
to himself, and avoid a covenant in it to pay rent; nor can he 
hold lands conveyed to him in exchange, and avoid the transfer 
of those with which he parted ; ■• nor can he hold land conveyed 
to him, and repudiate a mortgage given at the time as part of 
the same transaction to secure the purchase money .•• 

••Clark ▼. Tate, 7 Mont 171, 14 Pac. 701; Craig t. Van Bebber, 100 Mo. 
584, 13 S. W. 906, 18 Am. St Rep. 568 ; Philips v. Green, 3 A. K. Marsh. (Ky.) 
7, 13 Am. Dec. 124; Stotts ▼. Leonhard, 40 Mo. App. 336; Scott v. Buchanan, 
11 Humph. (Tenn.) 409; Hughes v. Watson, 10 Ohio, 134. Where, however, 
the action is based on the assumption that defendant is wrongfully in posses- 
sion, as in the case of ejectment, the weight of authority seems to require 
that there shall have been some previous act of disaffirmance on the part of 
the infant, for until disaffirmance defendant is rightfully in possession. See 
Law V. Long, 41 Ind. 586; McClanahan v. Williams, 130 Ind. 30, 35 N. E. 
897; Bool v. Mix, 17 Wend. (N. Y.) 135, 31 Am. Dec. 285; Clawson v. Doe, 
5 Blackf. (Ind.) 300; Wallace's Lessee v. Lewis, 4 Har. (Del.) 75. See "Ir^ 
fanu;* Deo. Dig. (Key-No.) §{ SI, 57; Cent. Dig. SS 41-03, 149-160. 

•r McCarty v. Iron Co., 92 Ala. 463, 8 South. 417, 12 U B. A. 136. And see 
note 55, supra. See *'Infant9," Deo. Dig. (Key-No.) S SI; Cent. Dig. iJ il-es. 

••Badger v. Phlnney, 15 Mass. 359, 8 Am. Dec. 105; Blgelow v. Kinney, 
8 Vt 353, 21 Am. Dec. 580; Lowry v. Drake's Heirs, 1 Dana (Ky.) 46. Cf. 
O'Rourke v. Insurance Co., 23 R. I. 457, 50 Aa 834. 57 L. R. A. 496, 91 Am. 
St Rep. 643. See ** Infants," Dec. Dig. (Key-No.) {|§ SO, SI; Cent. Dig. S| 
tl-^S. 

•• Buchanan v. Hubbard, 119 Ind. 187, 21 N. E. 538. See •'Infants,'* Deo. 
Dig. (Key-No.) {{ SO, SI; Cent. Dig. H J^l^S. 

•0 Hubbard v. Cummings, 1 Oreenl. (Me.) 11; Uecker v. Koehn, 21 Neb. 
659, 82 N. W. 583, 59 Am. Rep. 849; Blgelow v. Kinney, 3 Vt 353, 21 Am 



§§ 110-111) RETURN OF CONSIDERATION 213 

As a rule, a person 'cannot retain property purchased by him 
during infancy, and repudiate the contract under which he receiv- 
ed it; nor can he disaffirm a sale by him, and retain the consid- 
eration received; but as to this there is much conflict, and wc 
must go into the subject at some length. 



SAME— RETURN OF CONSIDERATION ' 

110. An infant may disaffirm his executory contract without first 

returning the consideration he has received; but after 
disaffirmance he must return the consideration, if he has it. 

111. If the contract has been executed by him, he cannot avoid it, 

and recover what he has paid, or for what he has done, 
without returning the consideration if he has it; but, 
by the weight of authority, if he has squandered or other- 
wise disposed of it during his minority, it is otherwise. 

EXCEPTIONS— (a) ThQugh the infant has the consideration, 
he may effectually disaffirm his executed contract without 
its return as a condition precedent, if he does not affirm- 
atively seek relief; as, for instance, where he disaffirms 
his conveyance of land by conveying to another. 

(b) Some courts hold that an infant cannot recover what he has 
paid, or for what he has done, under a contract by which 
he has received a substantial benefit, imless he can and 
does place the other party in statu quo. This probably 
does not apply to his conveyances of land. 

As we have just stated, when a person avoids a contract ma 
l)y him during his minority, he must, as a rule, return the con- 
sideration he has received.*^ As to whether or not he must do 
so as a condition precedent to disaffirmance, or whether the other 
party must be left to his action to recover the consideration after 
disaffirmance, and as to whether the consideration must be returned 

Dec 589; Heath v. West, 28 N. H. 108; Young v. McKee, 13 Mich. 556; 
Skinner v. Maxwell, 66 N. C. 45; Cogley v. Cushman, 16 Minn. 402 (GU. 
854) ; CalUs v. Day, 38 Wis. 643 ; Heady v. Pinkham, 181 Mass. 351, 63 N. E. 
887. Cf. Nottingham, etc., Soc. v. Thurston, 19 L. T. R. 54 (H. L.). See 
"^Infants,"' Dec. Dig, (Key-yo,) $$ SO, SI; Cent. Dig, %% 41-6S, 

•1 Badger v. Phlnney, 15 Mass. 359, 8 Am. Dec. 105; Blgelow y. Kinney, 
6 y t 353, 21 Am. Dec. 689 ; Wllhelm t. Hardman, 13 Md. 140 ; Mustard v. 
Wohlford*s Heirs, 15 Orat (Ya.) 329, 76 Am. Dec. 209; Combs v. Hawes (Gal.) 
8 Pac. 597 (statutory) ; Kitchen r. T>ee, 11 Paige (N. Y.) 107, 42 Am. Dec. 
101; BarUett v. Cowles, 15 Gray (Mass.) 440. See "Infant9,** Deo. Dig, {Key- 
Jio,) §i si, 58; Cent, Dig, §§ 59, 157. 




214 CAPACITY OP PARTIES (Ch. 6 

where it has been wasted or otherwise disposed of, the decisions 
are conflicting. 

(a) Where the contract is executory on the part of the infant^ 
and he has not ratified it by his conduct, as explained above,**, 
it cannot, according to the weight of authority, be enforced against 
him, even though he retains the consideration received by him 
in kind. He need not return the consideration as a condition 
precedent to repudiating the contract and pleading his infancy 
in an action brought against him to enforce it.** Wheli he repu- 
diates his contract, however, he no longer has any right to the 
consideration he has received, and at least, if he has it, the other 
party may maintain an action to recover it.** According to the 
weight of authority, if he has disposed of the consideration so 
that he cannot return it in kind, he cannot be held liable for it. 
The adult is remediless.** It must be remembered that retaining 
the consideration may amount to a ratification. 

(b) Where the contract is executed on the part of the infant, 
and he has the consideration received by him in kind, many cases 
hold that he cannot repudiate the contract, and recover what he 
has parted with, unless he returns, or oflFers to return, the con- 
sideration.** Many cases, on the other hand, go to the extent 
of saying without qualification that the return of the consideration 
in such a case is not a condition precedent to the right to disaffirm 
and recover what has been parted with; although, if the infant 
still retaitis the consideration, the adult may reclaim it, or, upon 

•a Ante, p. 209. 

•t Craighead v. Wells, 21 Mo. 409; Price ▼. Furman, 27 Vt 268^ 65 Am. 
Dec. 194. See, also, Nichols & Shepard Go. t. Snyder, 78 Minn. 502, 81 N. W. 

516. See "Infants;* Deo, Dig. {Key-No.) §§ SI, 58; Cent, Dig, %% 59, 157. 

•« Badger v. Phinney, 15 Mass. 859, 8 Am. Dec. 105; Mustard y. Wohl- 
ford's Heirs, 15 Grat (Va.) 329, 76 Am. Dec. 209. Wheife an Infant bought 
of another infant, and paid the price, and after the seller had spent the 
money the buyer disaffirmed the contract, and brought action to recover th& 
money paid both in contract i^nd in tort, it was held that the defendant's plea 
of infancy was a defense to the count in contract, and that there was no 
dealing with the money by the defendant which could constitute conversion. 
Drude V. Curtis, 183 Mass. 317, 67 N. E. 317, C2 L. R. A. 755. See "Infanta,'^ 
Deo, Dig. {Key-No,) §§ 5i, 58; Cent, Dig, §§ 5.9. 151, 

•» See Brawner v. Franklin, 4 GUI (Md.) 470; Boody v. McKenney, 23 Me. 

517, 525. And see post, p. 216. See *7n/ants," Dec. Di{f. {Key-No,) %\ 50, 57; 
Cent Dig, §§ 41-63, IS6-I48. 

«• See Price v. Furman, 27 Vt 2GS, 65 Am. Dec 194; LEMMON v. BEB- 
MAN, 45 Ohio St 505, 15 N. E. 476, Throckmorton Gas. Contracts, 140; Carr 
V. Clough, 26 N. H. 280, 59 Am. Dec. 345; Robinson v. Weeks, 56 Me. 102; 
Johnson v. Ins. Co., 56 Minn. 3Co, 57 N. W. 934, 26 L. R. A. 187, 45 Am. St 
Rep. 473; Lane v. Iron Co., 101 Tenn. 681, 48 S. W. 1094; Bell v. Burk- 
halter (Ala.) 57 South. 460. See, also^ cases cited infra, note 74. Formalt 



§§ llO-lll) BETUBN OF 0ON8IDESATION 215 

demand and refusal, recover in trover.*^ That return of the 
consideration is not a condition to disaffirmance, where the 
disaffirmance by the infant is by dealing with the property 
he has parted with as his own,, andv where he is not seeking 
the aid of a court to recover it, is everywhere conceded ; as where, 
having sold land and received the purchase money, he disaffirms 
by conveying the land to another. The latter deed is effectual 
though he has not returned the consideration for his prior deed.** 
(c) According to the weight of authority, an ijjfant, on attain- 
ing his majority, may disaffirm his contract, whether it is execu- 
tory or executed, and in the latter case may recover back what 
he has parted with or for what he has done, without returning 
or oflFering to return the consideration received by him, if, during 
his minority, he has squandered or otherwise disposed of it so 
that he cannot return it** The rule is also applied to cases where 

tender Is not required as a condition precedent to a suit by him, but restora- 
tion must be made on the trial as a condition of the judgment Starr v. 
Watklns, 78 Neb. 610, 111 N. W. 863 ; Jones v. Valentine's School of Teleg- 
raphy, 122 Wis. 818, 89 N. W. 1043w Money borrowed by an infant mort- 
gagor and used to pay off prior Uens and for permanent improvements will 
be reiiRirded In equity as in his hands; and In a suit to foreclose the mort- 
gage after disaffirmance, relief may be given by a sale of the property and 
the application of the proceeds in such manner as to place the mortgagee in 
statu quo, provided this can be done without depriving the mortgagor of an 
interest equivalent to that which he had ix^ the property at the time the mort- 
gage was executed. MacGreal v. Taylor, 167 U. S. 688, 17 Sup. Ct 961, 42 
L. Ed. 32a Gf. Nottingham, etc., Society v. Thurston, 19 L. T. R. 64 (H. of 
L.) affirming a. c [1902] 1 Ch. 1 (G. A.) reversing s. e. [1901] 1 Gh. 88^ Bee 
''Infants,*' Dec. Dig. {Key-No,) H 91, ^8; Cent. Dig. §{ 59, 157. 

•T Ghandler v. Simmons, 97 Mass. 508, 93 Am. Dec. 117 ; Tucker ▼. More- 
land, 10 Pet 58, 73, 9 L. Ed. 345; Shaw v. Boyd, 5 Serg. & R. (Pa.) 309, 9 Am. 
Dec 368 ; McGarty v. Iron Go., 92 Ala. 463, 8 South. 417, 12 L. R. A. 136 : 
Shirk V. Shultz, 113 Ind. 571, 15 N. E. 12 ; Drude v. Gurtis, 183 Mass. 317, 
67 N. B. 317, 02 U R. A. 755. See "Infants,'* Dec. Dig. (Key-No.) §S SI, 58; 
Cent. Dig. §i 59, 157. 

«• Dawson v. Helmes, 30 Minn. 107, 14 N. W. 462. See "Infants," Dec Dig. 
(Key-No.) § SI; Cent. Dig. J 59. 

«B Ghandler v. Simmons, 97 Mass. 508, 93 Am. Dec. 117; Price v. Funrian, 
27 Vt 268. 65 Am. Dec. 194 ; Boody v. McKenney, 23 Me. 517 ; LEMMON v. 
BEEMAN, 45 Ohio St 505, 15 N. E. 476, Throckmorton Gas. Gontracts, 140; 
Reynolds v. McGurry, 100 111. 356; Mustard v. Wohlford's Heirs, 15 Grat 
<Va.) 329, 76 Am. Dec 209; Miller v. Smith, 26 Minn. 248, 2 N. W. 942. 37 
Am. Rep. 407 ; Green v. Green, 69 N. Y. 553, 25 Am. Rep. 233 ; Mordecai v. 
Pearl, 63 Hun, 553, 18 N. Y. Supp. 543 ; Petrle v. Williams, 68 Hun, 589, 23 
N. T. Supp. 237 ; Brandon v. Brown, 100 IlL 519 ; Graig ▼. Van Bebber, 100 
Mo. 584, 13 S. W. 906, 18 Am. St Rep. 5G9 ; Lacy v. Pizler, 120 Mo. 383, 25 
S. W. 206; Harvey v. Brlggs, 68 Miss. 60, 8 South. 274, 10 L. R. A. 62; Engle-. 
bert V. Troxell, 40 Neb. 105, 58 N. W. 852, 26 L. R. A. 177. 42 Am. St. Rep. 
665; Manning ▼. Johnson, 26 Ala. 446, 62 Aol Dec; 732; Ridgeway v. Herbert. 



216 CAPACITY OF PARTIES (Ch. • 

the consideration is of such a nature that it cannot b'e returned, 
as, for example, instruction, or personal services,^' or insurance 
on one's life/* He is not bound to return an equivalent/* Some 
of the courts extend this rule to cases in which the infant was 
even benefited by disposing of the consideration/* The principle 
on which this rule is based is that the privilege of the infant to 
avoid his contracts is intended to protect him against the improvi- 
dence which is incident to his immaturity, and that to require 
him to return the consideration received and squandered or other- 
wise disposed of during his minority would be to withdraw this 
protection, and frustrate the object of the law. This rule has 
been applied, not only where the contract was a sale and con- 
veyance of land by the infant, but to sales of personalty and other 
contracts as well. 

(d) Many courts, on the other hand, apply the principle that 
the privilege of an infant is intended as a shield, and not as a 
sword— or, in other words, as a protection to the infant, and not 
as an instrument of fraud and injustice to others — hold, or have 
held, that an infant cannot avoid his executed contracts, whereby 
he has benefited, and recover what he has parted with, or for 
what he has done, unless he can and does restore the consideration 
he has received; and that it is immaterial that the consideration 
has been disposed of by him, or for any other reason cannot be 
returned. In other words, they hold that an infant who receives 
a substantial consideration for his executed contract cannot, on 

150 Mo. GOG, 51 S. W. 1040, 73 Am. St. Rep. 4G4; MacGreal v. Taylor, 167 
U. S. 088, 17 Sup. Ct 961, 42 L. Ed. 326; Bullock v. Sprowla. 93 Tex. 188, 
54 S. W. 661, 47 L. R. A. 326, ^7 Am. St Rep. 849; White v. Cotton Waste 
Corp., 178 Mass. 20, 69 N. E. 642 ; GUlls v. Goodwin, 180 Mass. 140, 61 N. E. 
813, 91 Am. St Rep. 265 ; Shipley t. Smith, 162 Ind. 526, 70 N. E. 803 ; Lake 
V. Perry, 95 Miss. 550, 49 South. 569. Bee **InfanU,** Dec. Dig. {Key-No.) 
§§ SI, 58; Cent. Dig. {{ 59, 157. 

TO International Text-Book Co. ▼. Doran, 80 Conn. 307, 68 AtL 255. Bee 
** Infants,'* Dec. Dig. (Key-No.) K SI, 58; Cent. Dig. §} 59, 151. 

Ti Simpson V. Prudential. Ins. Co., 184 Mass. 348, 68 N. E. 673, 63 L. R. A. 
741, 100 Am. St Rep. 560. Bee "Infants,"' Dec. Dig. (Key-No.) §{ SI, 58; Cent. 
Dig. IS 59, 151. 

72 Simpson V. Prudential Ins. Co., supra; Englebert v. Troxell, 40 Neb. 105, 
58 N. W. 852, 26 L. R. A. 177, and note, 42 Am. St Rep. 665. Bee *'Infants,*' 
Deo. Dig. (Key-No.) {§ SI, 58; Cent. Dig. i§ ,59, 151. 

r« A minor who contracts with his employer that the price of articles, not 
necessaries, purchased by him from his employer, shall be deducted from his 
wages, may, on becoming of age, repudiate his contract, and recover his wages 
without deduction; and this, even though he may have disposed of the ar- 
ticles to his benefit Morse y. Ely, 154 Mass. 458, 28 N. E. 577, 26 Am. St 
Rep. 2G3. And see Genereux T. Sibley, 18 R. I. 43, 25 Atl. 345. Beff "Infants,'* 
Dec Dig. (JKey-No.) §{ SI, 58; Cent. Dig. » 59, 151. 



g§ 110-111) HKTUHN OF 0ON8IDEHATION 217 

attaining his majority, avoid the contract, and recover what he 
has parted with, unless he can and does place the other party in 
statu quo.^* 

So it has been held that the executed contract of an infant' 
for the performance of personal services by him may not be dis- 
affirmed if not so unreasonable as to be evidence of fraud or 
undue advantage in its procurement.' • Thi^ exception to the 
general rule is made for the benefit and protection of the infant. 
As said in a Michigan case : '• "Should the law recognize the 
right of repudiation in such cases, no man could furnish an infant- 
with the necessaries of life in compensation for his services with- 
out the risk of a lawsuit ; and the minor, though able and willing 
to earn his support, would often be deprived of the opportunity, 
and driven perhaps to vagrancy and crime." 

And in some states the right of an infant to disaffirm a contract 
made by him when over a certain age is, by statute, made de- 
pendent upon his restoring the consideration or paying its equiva- 
lent, with interest.^' 

T4 Adams t. Bean. 67 Md. 63, 8 Atl. 664, 1 Am. St Rep. 379; Wllhelm ▼. 
Hardman, 13 Md. 140; Holden v. Pike, 14 Vt 406, 39 Am. Dec 228; Womack 
T. Womack, 8 Tex. 897, 417, 58 Am. Dec. 119 ; Bailey v. Bamberger, 11 B. Mon. 
(Ky.) 113. The rtfpht to avoid is conditional on his restoring what he received 
in specie, or, if he cannot, on his accounting for its value. Heath v. Stevens, 
48 N. H. 251 ; Hall v. Butterfield, 69 N. H. 354. 47 Ajn. Rep. 209 ; Bartlett v. 
Bailey, 59 N. H. 408 ; Riley v. MaUory, 33 Conn. 201. In England the right 
to avoid an executed sale and recover back the price is denied. Holmes v. 
Blogg, 8 Taunt 508 ; Ex parte Taylor, 8 De G. M. & Q. 25a See, also, Wil- 
liams V. Pasquall, Peake, Add. Ga& 197 ; Valentlni v. Ganali, 24 Q. B. D. 166. 
Where the personal contract of an infant Is fair and reasonable, and free 
from fraud or undue influence, and has been wholly or partly performed on 
both sides, so that the infant has enjoyed the benefits of it, but has parted 
with what he has received, or the benefits are of such a nature that he can- 
not restore them, he cannot recover back what he has paid. Johnson v. In- 
surance Ck)., 66 Minn. 365, 57 N. W. 934, SO N. W. 992, 26 L. R. A. 187. 45 
Am. St Rep. 473 ; Alt v. Graff, 65 Minn. 191, 68 N. W. 9. See, also. Rice v. ' 
Butler, 160 N. Y. 678, 55 N. E. 275, 47 L. R. A. 303, 73 Am. St Rep. 703. Cf. 
GUlls V. Goodwin, 180 Mass. 140. 61 N. E. 813, 91 Am. St Rep. 2G5. See "In- 
fants;' Dec/ Dig. (Key-No,) H 91, 58; Cent. Dig. §S 59, ISTT. 

Ts Squier v. Hydliff, 9 Mich. 274; Spicor v. Earl, 41 Mich. 191. 1 N. W. 923, 
82 Am. Rep. 162 ; Robinson v. Van Vleet, 91 Ark. 262, 121 S. W. 288 ; Ping 
Mln. & Mm. Ck). V. Grant 68 Kan. 732, 75 Pac. 1044. Bee '"Infants," Dec. Dig. 
(Key-No.) f k9; Cent. Dig. §f 112, US, 159. 

»• Squier v. Hydliff, supra, per Christlancy, J. See **Infant9," Dec. Dig. 
(Key-No.) f -JP; Cent. Dig. %% 112, US, 159. 

TT Age 18. Spencer v. Collins, 156 Cal. 298, 104 Pac. 320, 20 Ann. Gas. 49; 
Luce V. Jestrab^ 12 N. D. 548, 97 N. W. 848 ; Helland v. Colton State Bank, 20 
8. D. 325, 106 N. W. 60, holding, however, that a contract of suretyship may be 
avoided by mere disaffirmance, since the infant can derive no advantage from 
it See '*Infanti;* Dec. Dig. (KeiZ-No.) {§ SI, 58; Cent. Dig. fS 59, 157. 



21S CAPACITY OF PABTIBB (Ch. 6 



r 

SAME— EFFECT OF RATIFICATION AND DISAFFIRM- 
ANCE 

112. Ratification renders the contract absolutely bidding ab initio. 

113. Disafiirmancc renders the contract absolutely void ab initio, 

and the rights of the parties are determined as if there 
had never been a contract between them. 

114. Third parties, therefore, acquire no rights imder an avoided 

contract. 

Ratification 

The effect of a ratification, whether it is in express words or im- 
plied from conduct is to render the contract binding ab initio/* 
The new promise is not a new contract, but simply a ratification of 
the original contract; and a suit if brought must be on the orig- 
inal contract, and not on the new promise. The ratification cannot 
afterwards be retracted and the contract disaffirmed.''* 

DisaiRrmance 

So disaffirmance of a contract relates back to the date of the 
contract, and renders it void on both sides ab initio ; ** and it fol- ' 
lows that the rights of the parties must be determined as if there 
never had been any contract. Onq, therefore, who has occupied 
land under a deed by an infant which is avoided by him on becom- 
ing of age is liable for rents during the time of his occupation, just 
as if there has been no deed.** If the infant's vendee has sold the 
property to a third person, the latter occupies no better position 
than the vendee, and the property may be recovered from him even 

T8 Ward V. Anderson, IH N. C. 115, 15 S. B. 933; Palmer v. MUler. 25 Barb. 
(N. Y.) 399; Mlnock v. Shortridge, 21 Mich. 316; HaU v. Jones, 21 Md. 439. 
Bee "Infantt;* Dec. Dig. (Key-No.) {} SO, 57; Cent. Dig. M 4S, U7. 

T»Luce ▼. Jestrab, 12 N. D. 548, 97 N. W. 848; Hastings v. DoUarhide, 24 
Cal. 195. So, where a contract has been in part affirmed by a new arrange- 
ment and promise, the affirmance is not avoided by the foot that because of 
a subsequent disagreement the arrangement is not carried out Houlton ▼. 
Manteuffel, 51 Minn. 185, 63 N. W. 541. See ^'Infants;* Deo. Dig. (Key-No.) H 

50, 67; Cent. Dig. SS 48, W. * 

•0 RICE V. BOTER, 108 Ind. 472, 9 N. E. 420. 58 Am. Rep. 63, Throckmorton 
Cas. Contracts, 143; Mustard y. Wohlford*s Heirs, 15 Grat (Va.) 329, 76 Aol 
Dec. 209; French v. McAndrew, 61 Miss. 187; Boyden v. Boyden, 9 Mete. 
(Mass.) 519; Hoyt v. Wilkinson, 57 Vt 404; Mette ▼. Feltgen (111.) 27 N. B. 
911; Id., 148 111. 357, 36 N. B, 81; Derbcher v. Continental Mills, 58 Me. 217, 
4 Am. Rep. 286; Vent v. Osgood, 19 Pick. (Mass.) 572. See ^^Infants,*" Dee. 
Dig. (Key-No.) §S SI, 58; Cent. Dig. §§ 62, 158, 159. 

•1 French v. McAndrew, 61 Miss. 187. Bee **Infant%,*' Dec. Dig. (Key-No.) iS 

51, 58; Cent. Dig. H 62, 158, 159. 



§§ 112-114) EFFECT OF BATQIGATION AND DISAFFIKMANOB 2l9 

though he was a purchaser for value, and without notice of the de- 
feasible nature of the title.*' Or if the infant elects to sue his ven- 
dee, he may recover the market value of the property at the time 
of disaffirmance.** 

Where services have been rendered by an infant under a voidable 
contract, and he has received nothing under it, he may, on disaffirm- 
ing the contract, recover the value of the services as upon an im- 
plied contract.** In such a case he may, according to the better 
opinion, recover without any deduction for damages caused by his 
breach of the contract, for to allow such a deduction would be, in 
effect, to enforce the contract.** So, also, if an infant has paid 
money or parted with other property under a voidable contract, 
and has himself received nothing, he may recover what he has part- 
ed witfi on avoiding the contract.** As to whether an infant who 
has received something under his contract can avoid it and recover 
what he has parted with, or for what he has done, the authorities 
are conflicting. We have already discussed this question, and 
shown the different positions which the courts have taken.*' 

A disaffirmance cannot be retracted. Ratification of a contract 
after it has once been disaffirmed comes too late.** 

"Hm T. AndersoD, 6 Smedes & M. (Miss.) 216; Mustard t. Wohlford*s 
Heirs, 15 Grat (Va.) 329, 76 Am. Dec. 209 ; Searcy v. Hunter, 81 Tex. 644, 17 
S. W. 372, 26 Am. St Rep. 837 ; Downing v. Stone, 47 Mo. App. 144 ; MUes v. 
Lingerman, 24 Ind. 385. See **Infant9;* Dec. Dig, {Key-No.) f SI; Cent, Dig, 

«» Belckler v. Guenther, 121 Iowa, 419, 96 N. W. 895. See **InfanU,** Deo. 
Dig. (Key-No,) S SI; Cent. Dig. | 62. 

•*Medbury v. Watrous, 7 Hm (N. Y.) 110; Gaffney ▼. Hayden, 110 Mass. 
137, 14 Am. Rep. 680; Price v. Furman, 27 Vt 2C8. 65 Am. Dec. 194; Vent 
V. Osgood, 19 Pick. (Mass.) 572 ; Ray v. Haines, 52 111. 485 ; Judklns y. Walk- 
er, 17 Me. 38, 35 Am. Dec 229 ; Vehue ▼. Plnkham, 60 Me. 142 ; Lowe v. Slnk- 
lear, 27 Mo. 308; Dallas v. HoUingsworth, 3 Ind. 537; Lufkin v. Mayall, 25 
N. H. 82; Dearden v. Adams, 19 R. I. 217, 36 Atl. 3. But he can recover no 
more than he is equitably entitled to under all the circumstancea Hagerty v. 
Lock CJo.. 62 N. H. 676u See ''Infants;* Dec Dig. {Key-No.) U 49, 58; Cent, 
Dig. S 159, 

••Derocher v. Continental Mills, 58 Me. 217, 4 Am. Rep. 286; Whltmarsh 
▼. Hall, 3 Denio (N. Y.) 375 ; Radley • ▼. Kenedy (City Ct Brook.) 14 N. Y. 
Hupp. 268. But see Moses v. Stevens, 2 Pick. (Mass.) 332; Thomas v. Dike, 
11 Vt 273, 34 Am. Dec. 690. The defendant may set off any legal claim 
against the infant; as, for instance, for necessaries furnished him. Meredith 
V. Crawford, 34 Ind. 399. See "Infanta,** Dec Dig, (Key-No.) f 58; Cent, Dig, 
i 159, 

s« Stafford v. Roof, 9 Cow. (N. Y.) 626; Corpe v. Overton, 10 Blng. 252; 
Millard ▼. Hewlett, 19 Wend. (N. Y.) 301. And see cases cit^ in note 69, 
supra. Bee "Infanta,** Dec Dig. {Key-No.) | 58; Cent. Dig. §i 158, 159. 

•T Ante, p. 213, 

•i McCarty t. Iron Co., 92 Ala. 463, 8 South. 417, 12 L. R. A. 136; Plppen 



220. CAPACiTX or parties (Ch. (^ 



SAME— TORTS IN CONNECTION WITH CONTRACTS 

115. Though an infant is liable for his torts, a breach of contract 

cannot be treated as a tort, so as to make him liable. The 
tort must be separate and independent of it. 

116. At common law, though it is otherwise in equity, an infant 's 

false repr esentations as to his age wil ^ *]ot ^«»^p ^'^^ f^rtm 
ayoiding^is contract f they m ay, hpwCY^^r «'«ndgr him li«> 
ble in an action for deceit 

Though an infant is liable for his torts, it is well settled that a 
breach of contract cannot be treated as a tort, so as to make him lia- 
ble. The wrong, according to the weight of authority, mtist be 
more than a misfeasance in the performance of the contract, and 
must be separate from and independent of it.** "The test of an ac- 
tion against an infant,'' it has been said, "is whether a liability can 
be made out without taking notice of the contract." *• Or, accord- 
ing to an Indian case: "The test, and the only satisfactory test, is 
supplied by the answer to the question : Can the infant be held liable 
lyithout directly or indirectly enforcing his promise?"** Thus an 
infant cannot be held liable for false warranty on the sale or ex- 

▼. Insurance Co., 130 N. C. 23, 40 8. E. 822, 57 L. B. A. 600. Bee ^'Infamte,'^ 
Dec, Dig. (Key-No.) { 58; Cent. Dig. \% 158, 159. 

••Jennings v. Rundall, 8 Tenn R. 335, Ewell, Lead. Cas. 185; Gilson t. 
Spear, 38 Vt 311, 88 Am. Dec. 669; Eaton y. Hm, 50 N. H. 235, Am. Rep. 
189; Freeman ▼. Roland, 14 R I. 89, 51 Am. Rep. 340; West v. Moore, 14 Vt 
447, 39 Am. Dec 235; Campbell y. Perkins, 8 N. Y. at page 440; Campbell y. 
Stakes, 2 Wend. (N. T.) 1^7, 19 Am. Dec. 661; Mathews y. Cowan, 69 IlL 
341 ; Penrose y. Curren, 3 Rawle (Pa.) 361, 24 Am. Dec 856. But see Vance 
y. Word. 1 Nott & McC. (S. C.) 197, 9 Am. Dec. G83 ; Peigne y. SutcUffe, 4 Mc- 
Cord (S. C.) 387, 17 Am. Dec 756; RICE y. BOTER, 108 Ind. 472. 9 N. B. 
420, 58 Am. Rep. 53, Throckmorton Cas. Contracts. 143 ; Fitts y. Hall, 9 N. H. 
441. An infant is not bound on his warranties in an a implication for insur- 
ance, and the insurer cannot defend an action on the policy by proving their 
falsity. 0*Rourke y. Insurance Co.. 23 R. I. 457. 60 Atl. 834, 57 L. R A. 496. 
91 Am. St Rep. 643. A promise by an infant to marry Is not binding on him. 
but he may nevertheless be held liable for his tort in seducing a woman under 
promise of marriage. Becker y. Mason. 93 Mich. 33G, 53 N. W. 361. See '*Iip- 
fants,'' Dec Dig. {Key-No.) i 59; Cent. Dig. $| 161-166. 

•0 Lowery v. Cate, 108 Tenn. 54. 64 S. W. IOCS. 57 L. R. A. 673 and note. 91 
Am. St Rep. 744; ColUns v. Giflford, 203 N. T. 465, 90 N. E. 721. 38 L. R, A. 
(N. S.) 202, Ann. Cas. 1913A, 969. See **Infant8,** Dec. Dig. {Key-No.) %% 56, 
59; Cent. Dig. 8fi PP. 100, 16U166. 

• 1 RICE V. BOYER. 108 Ind. 472. 9 N. E. 420, 58 Am. Rep. 53. Tlirockmor- 
ton Cas. Contracts, 143. See "InfantM," Deo. Dig, (Key-No.) { 59; Cent. Dig. 
H 161-166. 



8§ 115-116) TOKTS IN CONNECTION WITH CONTBACT8 221 

change of a horse.** And where an infant hired a horse to ride, 
and injured it by overriding, it was held that he could not be made 
liable upon the contract by framing the action in tort for negli- 
geftce.*" On the other hand, where an infant hired a horse express- 
ly for riding, and not for jumping, and then lent it to a friend, who 
killed it in jumping, he was held liable, because what he had done 
was not an abuse of the contract, but an act which he was express- 
ly forbidden to do, and was, therefore, independent of the con- 
tract.** 

The fraud of an infant in falsely representing himself to be of 
age, and so inducing another to contract with him, does not estop 
him from pleading his infancy if sued upon his contract.** He 
may, however, in many jurisdictions, be held liable in an action for 
deceit.** In equity, where the infant has falsely represented that 

•* Colllni T. Qifford, 208 N. T. 466, 96 N. H 721, 88 U R. A. (N. S.) 202, Ann. 
Caa. 1913A, 069; Green v. Oreenbank, 2 Marsh. 485' (In which It \b said "the 
assmnpslt Is clearly the foundation of the action ; for It Is In fact andertaklng 
that the hone was sound*'). See ^*lnfonU,*^ Dec^ Dig, (Key-Ifo.) | 6t; Cent. 
Dig. I les. 

•s Jennings t. RundaU, 8 Term R. 835. He may, however, sue In trespass, 
though he cannot bring an action on the case, as the latter, but not the 'for- 
mer, would be based on lawful possession In defendant under the contract 
Campbell ▼. Stakes, 2 Wend. (N. Y.) 187, 19 Am. Dec. 561. See **InfanU,** Dee. 
Dig. (Key^No.) | 61; Cent. Dig. 1 167. 

•« Bumard v. Haggis, 15 O. B. (N. 8.) 45; Homer ▼. Thwlng, 3 Pick. (Mass.) 
492; Ray ▼. Tnbbs, 50 Vt 688, 28 Am. Rep. 519. Bat see Penrose Vt Garrai, 
3 Rawle (Pa.) 351, 24 Am. Dee. 356. See "Infanu;' Deo. Dig. (JTey-No.) t 
61; Cent. Dig. | 167. 

•B RICE y. BOXER, 108 Ind. 472, 9 N. E. 420, 58 Am. Rep. 53, Throckmor- 
ton Cas. Contracts^ 143 ; Studwell ▼. Shapter, 54 N. Y. 249 ; Burdett ▼. Wil- 
liams (D. a) 30 Fed. 697 ; Wleland t. Koblck, 110 111. 16^ 51 Am. Rep. 676 ; 
Conroe ▼. Blrdsall, 1 Johns. Gas. (N. Y.) 127, 1 Am. Dec. 105; Merrlam y. 
Cunningham, 11 Cush. (Mass.) 40; Brown y. McCune, 5 Sandf. (N. Y.) 228; 
Burley y. Russell, 10 N. H. 184, 34 Am. Dec. 146 ; Conrad y. Lane, 26 Minn. 
389, 4 N. W. COo, 37 Am. Rep. 412 ; Sims y. Eyerhardt, 102 U. S. 300, 26 L. 
Ed. 87 ; NorrllB y. Vance, 3 Rich. Law (S. O.) 164 ; Whltcomb y. Joslyn, 51 Vt 
79, 31 Am. Rep. 678 ; McKamy y. Cooper, 81 Ga. 679, 8 S. B. 312 ; Brooks y. 
Sawyer, 191 Mass. 151, 70 N. E. 953, 114 Am. St Rep. 594; Harper y. Utsey 
(Tex. Cly. App.) 97 S. W. 508. But see Bradshaw y. Van Winkle, 133 Ind. 134, 
32 N. E. 877; Lacy y. Plxler, 120 Mo. 383, 25 S. W. 206; Carolina Interstate 
Building & Loan Ass'n y. Black, 119 N. C. 323, 25 S. E. 975; New York 
Building Loan Banking Co. y. Fisher, 20 Misc. Rep. 244, 45 N. Y. Supp. 705. 
Contra* under Kansas statute, Dillon y. Bumham, 43 Kan. 77, 22 Pac. 1010. 
See "InfanU;* Dec. Dig. {Key-^o.) | 56; Cent. Dig. § 100. 

•• FlttB y. Hall, 9 N. H. 441 ; RICE y. BOYER, 108 Ind. 472, 9 N. E. 420, 5S 
Am. Rep. 63, Throckmorton Cas. Contracts, 143 ; Wallace y. Morss, 5 Hill (N. 
Y.) 391 ; Burley y. Russell, 10 N. H. 184, 34 Am. Dec 146 ; Manning y. John- 
son, 26 Ala. 446, 62 Am. Dec 782; Eckstein y. Frank, 1 Daly (N. Y.) 334. 
Contra, Nash y. Jewett, 61 Vt 501, 18 AtL 47, 4 U R. A. 561, 15 Am. St Rep. 



222 CAPACITY OP PARTIES (Cll. 6 

he was of age, or taken active steps to conceal his age, or been oth- 
erwise guilty of fraud, and has thereby induced the other party to 
enter into the contract, his fraud will estop him from pleading his 
infancy to the other's prejudice.*^ Mere failure to disclose his age, 
however, is not such fraud as will warrant equitable interference 
with the common-law rule* •• nor is mere misrepresentation of age 
suifficient, if it does not in fact deceive the other party.^^ Where 
an infant obtains goods by false and fraudulent representations as 
to his age, the better opinion is that the other party may rescind 
and recover them back.* 

We have already to some extent noticed the remedies of the adult 
party Where an infant repudiates his contract after having received 
the consideration. In such a case, he no longer has a right to hold 
the consideration; and, if he refuses to return it, he is, according 
to the better opinion, guilty of a tort, for which the other party 
may maintain an action.* 

931 ; Johnson ▼. Pie, 1 Sid. 258 ; Slayton ▼. Barry, 175 Mass. 513, 66 N. E. 
574, 49 L. R. A. 560, 78 Am. St Rep. 510. He Is not liable In trover. Slayton 
v^ Barry, supra. Bee **Infafits," Deo, Dig. (Key-No.) § 56; Cent. Dig, § 100. 

•T Ferguson ▼. Bobo, 54 ^Ilss. 121 ; Commander y. Brazil, 88 Miss. 668, 41 
South. 497, 9 Ia R. A. (N. S.) 1117; Ck>unty Board of Education v. Hensley, 
147 Ky. 441, 144 S. W. 63, 42 L. R. A. (N. S.) 643 (In which it Is said, per Mil- 
ler, J. : "The rule Is simply an application of the equitable doctrine that he 
who misleads another by his solemn assertion of a fact will not be allowed 
to assert the contrary to the prejudice of the person whom he has thus mis- 
led, and so perpetrate a fraud upon him"). International Land Co. t. Marsh- 
all, 22 Okl. 693, 98 Pac. 951, 19 L. R. A. (N. S.) 1066 (holding that an Infant 
guilty of fraud may not have his deed canceled without offering to refund the 
consideration received). But "in order to raise estoppel out of the evidence 
against the minor, that evidence must plainly show, not doubtfully or vaguely, 
but clearly and convincingly, the presence of actual, active, and willful fraud 
and misrepresentation." Lake v. Perry, 95 Miss. 550, 49 South. 569, 574, per 
Whitfield, C. J. And see G ran man, Marx & Cllne Co. v. Krienltz, 142 Wis. 556, 
126 N. W. 50, where estoppel is said to be confined to cases where the infant is 
In fact developed to the condition of actual discretion, and to cases of actual 
fraud, and where the contract or transaction Is beneficial. Bee ^^Infants," Dec. 
Dig. (Key-No.) § S6; Cent. Dig. | 100. 

••Baker v. Stone, 136 Mass. 405; Sewell v. Sewell, 92 Ky. 500, 18 S. W. 
162, 36 Am. St Rep. 606; Davidson v. Young, 38 IlL 145; Brantley v. Wolf, 
60 Miss. 420 ; Price v. Jennings, 62 Ind. Ill ; Thormaehlen v. Kaeppel, 86 
Wis. 378, 56 N. W. 1089. Bee '^Infanta:* Dec Dig. (Key-No.) § $6; Cent. Dig. 
%100. . 

•• International Text-Book Co. v. Doran, 80 Conn. 307, 68 Atl. 255; CSiarles 
V. Hastedt, 51 N. J. Eq. 171, 26 Aa 564. Bee ''InfanU;' Deo. Dig. (Key-No.) || 
65, 56; Cent. Dig. §| 100, 135. 

1 Badger v. Phlnney, 15 Mass. 359, 8 Am. Dec. 105 ; Neff v. Landls, 110 Pa. 
204, 1 Aa 177. See "Infants,** Deo. Dig. (Key-No.) § 56; Cent. Dig. § 100: 

s Badger v. Phlnney, 15 Mass, 359. 8 Am. Dea 105; Mustard v. Wohlford's 
Heirs, 15 Grat (Va.) 820, 76 Am. Dec 209 ; Vasse v. Smith, 6 Cranch, ^6, 8 



S 117) INSANB PBBSONS 223 

If the infant, while rightfully in possession of the consideration 
which he has received, has wasted or disposed of it during his mi- 
nority, and he is allowed to disaffirm his contract, the other party 
is remediless,' unless he can trace the property into the ha^ds of 
those who obtained it from the infant. 



INSANE PERSONS— IN GENERAL 

117. As a rule, a contract entered into by an insane person, or per- 
son non compos mentis, is voidable at his option; but the 
rule is subject to exceptions, as follows : ^ 

EXCEPTIONS — (a) The following contracts are valid and 
binding: 

(1) Contracts created by law, or quasi contracts. 

(2) In most, but not all, jurisdictions, where the sane party 

acted fairly and in good faith, without actual or con- 
structive knowledge of the other's insanity, and the 
contract has been so far executed that he cannot be 
placed in statu quo. 
(b) The following contracts are void : 

(1) In most, but not all, jurisdictions, contracts by a person 

who has been judicially declared insane on inquisition, 
and placed under guardianship. 

(2) In a few jurisdictions, deeds; and, in most jurisdic- 

tions, powers of attorney or other appointments of an 
agent. 

Formerly it was thought that a man could not avoid a contract 
entered into while he was non compos mdntis. It was said to be a 
maxim of the common law that no man of full age should be allow- 
ed by plea to stultify himself, and thereby avoid his own deed or 
contract.* It seems, however, that this never was the common law, 
and that the cases so holding were erroneous.* At any rate, the 

L. Ed. 207 ; Manning ▼. Johnson, 26 Ala. 446, 62 Am. Dec. 732. Bee **Infant8," 
Deo. Dig. {Key-No.) % 12; Cent. Dig. {§ 180-183. 

s Ante, p. 216, note 68. 

« In Ipock T. Atlantic & N. G. B. Co.» 158 N. O. 445, 74 S. E. 852, this state- 
ment of the black letter text, together with that in Exception (a), (2), is 
quoted and approved. See *'Insane Persona,** Deo. Dig, (Keu-yo.) | 75; Cent. 
Dig. I Its. 

B Beverley's Case, 4 Coke, 123; Go. litt 147; 2 BL Gomm. 2&2. See **In- 
$ane Pergong," Dec. Dig. (Key-No.) § 75; Cent. Dig. | 125. 

• Fitzh. Nat Brev. 202 ; Yates ▼. Boen, 2 Strange, 1104 ; Webster y. Wood- 
ford, 8 Day (Conn.) 90; MitcheU t. Kingman, 5 Pick. (Mass.) 431; CSameron- 



22i CAPACITY OF PARTIES (Ch. 6 

doctrine has long since been exploded, and it is almost universally 
held that a contract made by a person who is lacking in mental 
capacity, unless he has been judicially declared insane, is at most 
voidable.^ 

The incapacity may result from lunacy,* from idiocy,* from im- 
becility,** from senile dementia,*"^ or any other defect or disease of 
the mind, whatever may be its cause.** To render a person thus 
incapable of contracting, his infirmity need not be so great as to 
dethrone his reason, nor amount to entire want of reason ; ** but, 
on the other hand, it must be something more than mere weakness 
of intellect.*^ It must be such as to render the person incapable 

Barkley Co. ▼. Thornton Light ft Power Co., 138 N. C 365, 60 S. B. 695, 107 
Am. St Bep. 582. Bee **In8ane PergOfiB,*' Dec. Dig. (JTey-.Vo.) | 75; Cent, Dig. 
I Its. 

f Post, p. 227, Prior to inquest, sanity Is presumed, and the burden of 
proof is on the party alleging insanity. Hill-Dodge Banking Co. y. Loomis, 140 
Mo. App. 62^ 119 S. W. 067. See "/tiMfM Pergons," Dec. Dig. {Key-Vo.) | 75; 
Cent. Dig. I Its. 

« Merrltt ▼. Gumaer, 2 Cow. (N. Y.) 552^ Bee "Imane Per$cn$,** Dec Dig. 
{KeV'Nc.) § 7t; Cent. Dig. § 12S. 

9 Bumham y. Kidwell, 113 111. 425 ; BaU y. Mannin, 8 Bllgh (N. S.) 1, Swell, 
Lead. Cas. 53i: See **lH9ane Pertone,** Dec Dig. (Key-yo.) | 72; Cent. Dig. | 
Its.' 

10 Smith's Committee y. Forsythe, 90 S. W. 1075, 28 Ky. Law Rep. 1034. See 
**Insane Pertoiw," Dec. Dig. (Key-Vo.) | 72; Cent. Dig. % ItS. 

11 As to weakness of intellect or imbecility from old age, see Guild y. Hull, 
127 IlL 523, 20 N. B. 665 ; Peabody y. KendaU, 145 lU. 519, 32 N. B. 674 ; Argo 
y. Coffin, 142 111. 368, 32 N. B. 679, 84 Am. St Bep. 86 ; Lynch y. Doran, 95 
Mich. 395, 54 N. W. 882 ; King y. Cummlngs, 60 Vt 502, 11 Att. 727 ; Keeble 
V. Cummins, 6 Hayw. (Tenn.) 43; Coleman y. Frazer, 8 Bush (Ky.) 300; Bres- 
sey's Adm'r y. Gross (Ky.) 7 8. W. 150; Clark v. Kirkpatrick (N. J. Ch.) 16 
Ati. 309 ; Trimbo y. Trimbo, 47 Minn. 389, 50 N. W. 350 ; Cole y. Cole. 21 Neb. 
84, 31 N. W. 408 ; Crowe y. Meters, 63 Mo. 429 ; Shaw v. Ball. 55 Iowa, 55, 7 
N. W. 413 ; MarsfaaU y. MarshaU, 75 Iowa, 182, 89 N. W. 230. Old age is not of 
itself eyldence of incapacity. Buckey y. Buckey, 38 W. Va. 168, 18 S. B. 383. 
And see cases cited aboye. Bee ^Insane Persont,** Dec. Dig. (jkey^Nc.) | '7t; 
Cent. Dig. | ItS. 

IS See Henderson y. McGregor, 30 Wis. 78; Brothers y. Bank, 84 Wis. 381, 
54 N. W. 786, 36 Am. St Rep. 932 ; Somes y. Skinner, 16 Mass. 348 ; Hale y. 
Brown, 11 Ala. 87; Conant y. Jackson, 16 Vt 335; Wilson y. Oldham, 12 B. 
Mon. (Ky.) 55 ; Johnson y. Chadwell, 8 HumplL (Tenn.) 145. Result of habit- 
ual drunkenness: Bliss y. Railroad Co., 24 Vt 424; Menkins y. Lightner, 18 
111. 282. See ** Insane Persona," Dec. Dig. {Key-No.) | 72; Cent. Dig. | ItS. 
' IS Ball y. Mannin, 8 Bllgh (N. S.) 1, Ewell, Lead. Cas. 534. For good illus- 
tration of degree of mental infirmity sufficient to constitute incapacity, see 
Smith's Committee y. Forsythe, 90 S. W. 1075, 28 Ky. Law Rep. 1034. See 
"Insane Persons" Deo. Dig. (Key-No.) § 72; Cefit. Dig. | 12S. 

1* Dennett y. Dennett 44 N. H. 531, 84 Am. Dec. 97; Stone t. Wllbem. 83 
111. 105; Lawrence v. Willis, 75 N. C. 471; Simonton y. Bacon, 49 Miss. 582; 
Des Moines Nat Bank y. CUisholm, 71 Iowa, 675, 88 N. W. 234 ; Famam y. 



I 117) IN8AKJB FBB80N8 , 225 

of comprehending the subject of the contract, and its nature and 
probable consequences.** He need not be permanently insane ; it 
is enough if he is insane at the time' he enters into, the contract** 
A contract made during a lucid interval is binding.*^ 

Nor need the insanity be general. A person who is laboring unr 
der an insane delusion is incapable of making a binding contract if 
his delusion is so connected with the subject-matter of the contract 
as to render him incapable of comprehending its nature and prob- 
able consequences. If such was his condition, he may avoid the 
contract, though he may have been perfectly sane in respect of 
other matters, and might have been able to make a binding contract 
in reference to some other subject-matter.** ' 

Brooks, 9 Pick. (Mass.) 212 ; QuUd v. HnU. 127 lU. 523. 20 N. B. 665 ; Davis 
▼. Phmips, 86 Mich. 198, 48 N. W. 513 ; White ▼. Farley, 81 Ala. 563, 8 South. 
215; Maddox v. Simmons, 81 Qa. 528; KlmbaU v. Cuddy, 117 lU. 213, 7 N. 
E. 589 ; Dewey v. Allgire, 87 Neb. 6, 55 N. W. 276. 40 Am. St Rep. 468 ; Cain 
▼. Warfoid, 83 Md. 23 ; GadwaUader v. West, 48 Mo. 483. The fact that a peiv 
son is deaf and dumb does not alone render him incapable. See Brower ▼. 
Fisher, 4 Johns. Gh. (N. Y.) 441; Brown v. Brown, 3 Genu. 299, 8 Am. Dec. 
187 ; Bamett ▼. Bamett, 54 N. G. 221. Bee '*Intane Persom," Dec Dip. (Key- 
Ifo,) § 72; Cent. Dig, § 125. 

li Dennett ▼. Dennett, 44 N. H. 531, 84 Am. Dec 97; Perry y. Pearson, 135 
m. 218, 26 N. E. 636 ; Bond y. Bond, 7 Allen (Mass.) 1 ; Toung y. Steyens, 48 
N. H, 185, 2 Am. Bep. 202, 97 Am. Dec. 592 ; Musselman y. Grayens, 47 Ind. 1 ; 
liilly y. Waggoner, 27 lU. 896; Baldwin y. Dunton, 40 lU. 188; Titcomb y. 
Vantyle, 84 111. 871 ; Worthington y. Wort^ington (Md.) 20 Atl. 911 ; Brown y. 
Brown, 108 Mass. 386; Growther y. Rowlandson, 27 Gal. 381; Somers y. 
Pumphrey, 24 Ind. 231 ; Bumham y. Mitchell, 34 Wis. 136 ; Henderson y. Mc- 
Gregor, 30 Wis. 78 ; Hoyey y. Ghase, 52 Me. 304, 83 Am. Dec 514 ; Hoyey y. 
Hobson, 55 Me. 256 ; Aiman y. Stout, 42 Pa. 114 ; Noel y. Karper, 53 Pa. 97 ; 
Dicken y. Johnson, 7 Ga. 484 ; Lozear y. Shields, 23 N. J. E^gi. 509 ; Tolson's 
Adm'r y. Gamer, 15 Mo. 494 ; Swartwood y. Ghance, 131 Iowa, 714, 109 N. W. 
297; Ratlifl y. Baltzer's Adm'r, 13 Idaho, 152, 89 Pac 71. See "Insane Per- 
$<ms" Dec. Dig. (Key-No.) § 72; Cent. Dig. § J 25. 

i^Chirtis y. Brownell, 42 Mich. 165, 3 N. W. 936; Peaslee y. Bobbins, 3 
Mete (Mass.) 164; Jenners y. Howard, 6 Blackf. (Ind.) 240. See **In8ane 
Persona:* Decy Dig. (Key-No.) | 72; Cent. Dig. | 125. 

17 Hall y. Warren, 9 Ves. 605; Lilly y. Waggoner, 27 111. 395; McGorm^ck 
y. LitUer, 85 111. 62, 28 Am. Rep. 610 ; Smith y. Smith, 108 N. G. 365, 12 S. 
E. 1045, and 13 S. E. 113; Jones' Adm*r y. Perkins, 5 B. Mon. (Ky.) 222; 
Norman y. Trust Go., 92 Ga. 295, 18 S. E. 27 ; Beckwith y. Butler, 1 Wash. 
(Va.) 224 ; Carpenter v. Garpenter, 8 Bush (Ky.) 283 ; Staples y. Wellington, 
58 Me. 453 ; Stewart y. Redditt, 3 Md. 81 ; Wright y. Market Bank (Tenn.) 
00 S. W. 62^. The authorities are conflicting as to whether the burden 1? 
on the other party to show that the contract was made in a lucid interyal. 
That it Is, see Fishbume y. Ferguson's Heirs, 84 Va. 87, 4 S. E. 575 ; Sheet? 
y. Bray, 125 Ind. 33. 24 N. B. 357; Hall y. Warren, 9 Ves. 605. Contra, 
Wright y. Wright, 139 Mass. 177, 29 N. B. 380. See **Insane Persons," Dec. 
Dig. (Key-No.) t 72; Cent. Dig. I 125. 

IS Bond. y. Bond, 7 Allen (Mass.) 1; Rlggs y. Tract Soc, 93 N. Y. 503: 

Clark Cont.(3d Ed.) — 15 



226 , CAPACITT OF PABTIBS (Ch. 6 

Effect of Contracts 

Thus far we have spoken of the contracts of a person non compos 
mentis as being voidable only, and as a rule they are so ; but, as in 
the case of infants, some of his contracts as valid, and some of them 
are held to be absolutely void. In some jurisdictions the contract 
is held binding where the other party acted in good faith, and with- 
out knowledge of the insanity. Of this we will presently speak at 
some length. 

Same — Quasi Contracts 

As jn the case of infancy, the rule that a person may avoid a con- 
tract made while he was insane does not apply to so-called contracts 
created by law, or quasi contracts, for here the obligation is impos- 
ed by law without regard to the consent of the party bound.** 

Same — Contracts for Necessaries 

Nor does the rule apply to the contracts of a person non compos 
mentis for necessaries furnished to himself or to his wife, or, in 
some jurisdictions, to his children.'* The rules on this subject are 
substantially the same as in the case of an infant's necessaries ; ex- 
cept, it seems, that, unlike an infant, a person non compos mentis 
is liable for labor and materials furnished for the preservation of 
his estate, where they were necessary for its preservation.** In 

Dennett ▼. Dennett, 44 N. H. 681» 84 Am. Dec. 97; Searle v. Oalbraitta, 73 
lU. 269 ; Alston v. Boyd, 6 Humph. (Tenn.) 604 ; Samuel v. Marshall, 3 Le^fa 
(Va.) 567; Dominlck v. Randolph, 124 Ala. 557, 27 South. 481. Monomania 
on the subject of religion or spiritualism. Boyce's Admir v. Smith, 9 Grat 
(Va.) 704, 60 Am. Dec. 813; Lewis v. Arbuckle, 85 Iowa, 836, 62 N. W. 237, 
16 li. R. A. 677; West v. Russell, 48 Mich. 74, 11 N. W. 812; Burgess ▼. Pol- 
lock, 53 Iowa, 273, 6 N. W. 179, 36 Am. Rep. 218w See **InBane Persoiu," Dec. 
Dig. (Key-No.) | 7«; Cent. Dig. | 125. 

i» Reando v. Misplay, 90 Mo. 251, 2 S. W. 405, 59 Am. Rep. 13 ; post, p. 644. 
Bee "Insane Persons,** Dee. Dig. {Key-Vo.) | 75; Cent. Dig. |§ 125-1S2. 

so La Rue y. Gilkyson, 4 Pa. 375, 45 Am. D^. 700; Richardson v. Strong, 
35 N. G. 106, 55 Am. Dec. 430 ; McGormick v. Littler, 85 IlL 62, 28 Am. Rep. 
610; Baxter v. Portsmouth, 5 Barn, ft O. 170; Van Horn v. Hann, 39 N. J. 
Law, 207; Read y. Legard, 6 Exch. 636; Surles y. Pipkin, 69 N. G. 513; 
Shaw y. Thompson, 16 Pick. (Mass.) 198* 26 Am. Dec. 655 ; Sawyer y. Lufkin, 
56 Me. 308; Reando y. Misplay, 90 Mo. 251, 2 S. W. 406, 69 Am. Rep. 13; 
Pearl y. McDowell, 8 J. J. Marsh. (Ky.) 658» 20 Am. Dec 199; Kendall y 
May, 10 Allen (Mass.) 59; Rhodes y. Rhodes, 44 Gh. Diy. 94; Sceya y. True. 
63 N. H. 627. Liability for necessaries furnished his wife. Read y. Legard. 
supra. And see Smith's Committee y. Forsythe, 90 S. W. 1075, 28 Ky. Law 
Rep. 1084, holding imbecile liable for necessaries furnished himself, wife, and 
chUdren, although the other party had knowledge of his Incapacity to con- 
tract He has eyen been held liable for luxuries furnished in good fttith. 
Kendall y. May, supm. See "Insane Persons,** Dec. Dig. {Key-Vo.) | 75; 
Cent. Dig. §§ 8P, i28, 129. 

21 Williams y. Wentworth, 5 Beay. 323. See "Insane Persons^** Dec. Dig 
(Key-No.) I 75; Cent. Dig. §§ 89, 128, 129. 



§ 117) INSAKB PERSONS < 227 

all cases the credit must have been given to the insane person, and 
not to some third person.** The fact that the person has been 
judicially declared insane, and placed under guardianship, does not 
prevent his liability for necessaries.** 

Same — Void and Voidable 

It has been held by some courts that the deed of an insane per- 
son,** or a power of attorney or other appointment of an agent,** 
is absolutely void. In mos( jurisdictions, however, no distinction is 
made in this respect between the deed of an insane person and that 
of an infant. It is held to be voidable, and not void.** As an almost 
universal rule, all his contracts other than valid ones are not void, 
but simply voidable at his option ; " and they are binding on the 
other party if he elects to hold him.** 

>s Bish. Cont I 968 ; Massacbusetts General Hospital ▼. ralrtutnks, 129 
Mass. 78» 37 Am. Rep. SOS ; Id., 132 Mass. 414. See "Insane Persons,*' Dec, 
Dig. (Key-No.) | 75; Cent. Dig. |§ 89, 128, it9. 

SB McCrlllis y. Bartlett, 8 N. H. 569; Sawyer ▼. Lafkln* 66 Me. 308; Re- 
ando ▼. Mlsplay, 90 Mo. 251, 2 S. W. 405, 69 Am. Rep. IS; Baxter ▼. Ports- 
mouth, 6 Bam. ft O. 170 ; Fniitt t. Anderson, 12 IlL App. 421. See **Insane 
Persons," Deo. Dig. {Key -No,) § 75; Cent. Dig. |i 89, 128, 129. 

S4 Van Deosen v. Sweet, 51 N. Y. 378 (but see Ingraham v. Baldwin, 9 N. 
7. 45); Rogers y. Blackwell, 49 Mich. 192, IS N. W. 612; In le Estate of 
Desilyer, 6 Rawle (Pa.) Ill, 28 Am. Dec. 645; Farley y. Parker, 6 Or. 105, 
25 Am. Rep. 604; Goodyear y. Adams, 52 Hun, 612, 6 K. Y. Supp. 275; 
Brown y. Miles, 61 Hun« 453, 16 N. Y. Supp. 251 ; Elder y. Schumacher, 18 
Colo. 433, 33 Pac. 175 ; Thompson y. Leach, 3 Salk. 300 ; Edwards y. Dayen- 
port (a G.) 20 Fed. 756. See '^Insane Persons,** Dec. Dig. {Key-No.) | 61; 
Cent. Dig. H 9S''99. 

>• Dexter y. Hall, 16 Wall. 9, 21 L. Ed. 73. And see Maryln t. IngUs, 39 
How. Prac. (N. Y.) 329 ; Plaster y. RIgney, 97 Fed. 12, 38 a C. A. 23 ; Mc- 
Glun y. McClun, 176 111. 376, 52 N. E. 928. But see Williams y. Sopieha, 94 
Tex. 430, 61 S. W. 115; Tiffany, Ag. 9a See ** Insane Persons,** Dee. Dig. 
{Key-No.) I 61; Cent. Dig. §| 9S-99. 

«• HOVEY y. HOBSON, 53 Me. 461, 89 Am. Dec. 705, Throckmorton, Caa 
Contracts, 149; Wait y. Maxwell, 6 Pick. (Mass.) !217, 16 Am. Dec. 391; Gib- 
son y. Soper, 6 Gray (Mass.) 279, 66 Am. Dec. 414; Arnold y. Iron Works, 
1 Gray (Mass.) 434; Allis y. Billings, 6 Mete. (Mass.) 416, 39 Am. Dec. 744; 
Eyans y. Horan, 52 Md. 602; Bumhani y. Kidwell, 113 111. 425; Eaton y. 
Eaton, 37 N. J. Law, 108, 18 Am. Rep. 716 ; Boyer y. Berryman, 123 Ind. 451, 
24 N. E. 249; Breckenrldge's Heirs y. Ormsby, 1 J. J. Marsh. (Ky.) 245, 19 
Am. Dec. 71 ; Allen y. Berryhill, 27 Iowa, 534, 1 Am. Rep. 309 ; French Lum- 
bering Co. y. Theriault, 107 Wis. 627, 83 N. W. 927, 51 U R. A. 910, 81 Am. 
St Rep. 856; Riley y. Carter, 76 Md. 581, 25 AtL 667, 19 L. R. A. 489, and 
note, 35 Am. St Rep. 443. See "Insane Persons,** Dec. Dig. iiKey-No.) | 61; 
Cent. Dig. §| 98-99. 

2« Eaton y. Eaton, 37 N. J. Law, 108, 18 Am. Rep. 716; Carrier y. Sears, 
4 Allen (Mass.) 336, 81 Am. Dec. 707 ; Bumham y. Kidwell, 113 111. 425 ; Ar- 

M See note 28 on following page. 



228 CAPACITY OF PARTtBS (Ch. 6 

Inquisition and Adjudication of Lunacy 

In most jurisdictions it is held — in some, however, by reason •£ 
express statutory provisions — that if a person has been judicially 
determined to be insane, and placed under guardianship, the decree 
and letters of guardianship take from him all capacity to contract* 
and that his contracts while under guardianship are absolutely 
void.** It has been held, however, that this rule applies only 
where there has been a judgment of a court of competent jurisdic- 
tion declaring the person of unsound mind and incapable of manag- 
ing his own estate, and appointing a guardian or committee for that 
purpose, and that it does not apply to statutory proceedings mere- 
ly to determine whether a person is insane for the purpose of com- 
mitting him to a hospital for the insane.** In other jurisdictions 
the fact that he has been adjudged insane, and placed under guard- 
ianship, only raises a presumption of incapacity to contract, which 
may be rebutted ; but the presumption is very strong, and the proof 
of capacity must be clear.** 

nold T. Iron Works, 1 Gray (Mass.) 434 ; HOVEY t. HOBSON, 68 Me. 451, 
89 Am. Dec. 705, Throckmorton, Gas. Gontracta, 149 ; Riley v. Garter, 76 Md. 
581, 25 AU. 667, 19 U R. A. 489. 85 Am. St Rep. 443 ; ^tna Life Ins. Go. ▼. 
Sellers, 154 Ind. 870, 56 N. E. 97, 77 Am. St Rep. 481. Gontra in Alabama. 
Walker ▼. Winn, 142 Ala. 560, 39 South. 12, 110 Am. St Rep. 50, 4 Ann. Gas. 
587, where It is said: "Whatever may be the rulings of other Jurisdictions 
upon the question, this court is fully committed to the doctrine that the con- 
tract of an insane person is absolutely yoid." Bee "Insane Penons,** Deo, 
Diff. (Key-yo.) | 61; Cent. Dig. || 9S^9. 

s« Harmon y. Harmon (G. C) 51 Fed. 118; Allen t. BerryhiU, 27 lown, 534, 
1 Am. Rep. 809 ; San Francisco Gre^t Glearing-House t. McDonald, 18 Gal. 
App. 212, 122 Paa 964 (holding that the other party may not avoid the con- 
tract even under a statute declaring that **a person entirely without under- 
standing has no power to make a contract of any kind*'). See **In9ane Per^ 
aom,** Deo. Dig. (Key-No.) I 61; Cent. Dig. || 99-^9. 

»• Wait V. Maxwell, 5 Pick. (Mass.) 217, 16 Am. Dec 891; Leonard v. Leon- 
ard, 14 Pick. (Mass.) 280; Rannels v. Gemer, 80 Mo. 474; Fitzhugfa v. Wil- 
cox, 12 Barb. (N. Y.) 235; Bradbury ▼. Place (Me.) 10 Atl. 461; Mohr v. 
Tulip, 40 Wis. 60 ; Griswold v. Butler, 3 Gonn. 227. Where the guardian was 
discharged as being an unsuitable person, and no other guardian was ap- 
pointed, the decree adjudging the ward insane was not conclusive as to his 
incapacity dttev the guardian's discbarge. Wlllwerth v. Leonard, 156 Mass. 
277, 31 N. E. 299. See "Insdne Persona,** Deo. Dig. (Key-No.) | 26; Cent. 
Dig. § S6. 

so Knox V. Haug, 48 Minn. 58, 50 N. W. 034; Leinss v. Weiss, 83 Ind. App. 
344, 71 N. E. 254. "His discharge as cured is as much a notice of the fact 
that he is sane as the inquest and admission to the asylum is notice of his 
insanity.*' Henley, J., in Leinss v. Weiss, supra. See *'Insane Persona,** Dec. 
Dig, (Key-No.) | 26; Cent. Dig. § 36. 

81 As to this, see Mott v. Mott, 49 N. J. Eq. 192, 22 Atl. 997; Hart v. Dea- 
mer, 6 Wend. (N. Y.) 497 ; Parker v. Davis« 53 N. C. 400 ; Hopson v. Boyd, 
6 B. Mon. (Ky.) 20G; Snook v. Watts^ 11 Beav. 105; In re Gangwere's Eth 



§ 117) INSANE PEBSONS * 229 

Ignorance and Good Faith of the Other Party 

In some states it is held that the contract of an insane person may 
be avoided by him, though it is fair and reasonable, and though it 
was entered into by the other party in perfect good faith, and in ig- 
norance of his infirmity.** "The fairness of the defendant's con- 
duct/* it was said in a leading Massachusetts case, "cannot supply 
the plaintiff's want of capacity." •■ 

The weight of authority in this country, however, is in favor of 
the doctrine that, if the sane party did not know, or have reasonable 
cause to know, of the other's insanity, and acted in good faith, and 
the contract Was fair, and has been so far executed that the parties 
cannot be placed in statu quo, it cannot be avoided.'^ In Molton v. 
Camroux, a leading English case, a lunatic had purchased annuities 
of a society, paid the money, and died, whereupon his administra- 
trix sued the society to recover back the money on the ground that 
the contract was void. The jury found that at the time of the con- 
tract the deceased was insane, but that there was nothing to indi- 
cate this to the defendant, and that the transaction was in good 
faith. It was held that the money could not be recovered. "The 
modern cases show," it was said, "that when that state of mind was 
unknown to the other contracting party, and no advantage was 
taken of the lunatic, the defense cannot prevail, especially where 
the contract is not merely executory, but executed in whole or in 
part, and the parties cannot be restored to their original posi- 

• 

tate, 14 Pa. 417, 53 Am. Dec 554^ Topeka Water Supply Co. y. Root, 56 Kan. 
187, 42 Pac. 715 ; Lower v. Schumacher, 61 Kan. 625, 60 Pac. 538 ; Stitzel v. 
Farley, 148 111. App. 635 (holding contract binding if made during a lucid 
interval). Bee **In8ane Persons,'* Deo. Dig. {Key-No.) §§ 26, 73; Cent. Dig. || 
S6, JS6. 

■« Seaver v. Phelps, 11 Pick, (Mass.) 304, 22 Am. Dec. 372; Gibson v. So- 
per, 6 Gray, 279, 66 Am. Dec. 414 ; HOVEY v. HOBSON, 53 Me. 451, 89 Am. 
Dec. 705, Throckmorton, Cas. Contracts, 149; Fitzgerald v. Reed, 9 Smedea 
& M. (Miss.) 94 ; Sullivan v. Flynn, 20 D. O. 396 ; Brlgham v. Fayerweather, 
144 Mass. 52, 10 N. E. 735 ; Orr v. Mortgage Co., 107 Ga. 499, 33 S. B. 708 ; 
Dewey v. Allgire, 87 Neb. 6, 55 N. W. 276, 40 Am. St Rep. 468; Wager y. 
Wagoner, 53 Neb. 511, 73 N. W. 937. Bee "Insane Persons;* Deo. Dig. {Key- 
's o.) I IS; Cent. Dig. § 125. 

»« Seaver v. Phelps, supra. Bee "Insane Persons,** Deo. Dig. {Key-No.) || 
6J, IS; Cent. Dig. §| 98, 99, 125. 

84 But if the other party did not act in good faith or had reasonable 
ground to believe the insane person incompetefnt, the contract may be avoided, 
although the consideration cannot be returned. Smith's Committee v. For- 
sythe, 90 a. W. 1075, 28 Ky. Law Rep. 1084. Knowledge that a petson is an 
invalid and cannot write with his own hand does not of itself constitute no- 
tice of unsoundness. Groff v. Stltzer, 77 N. J. Eq. 260, 77 Atl. 46. Bee "In- 
sane Persons,** Dec^ Dig. {Key-No.) | IS; Cent. Dig. | 125. 



230 CAPACITY or PARTIB8 (Ch. 6 

tion." ■• This case has been expressly followed and applied in a 
number of our courts, while others, thoug^h not citing it, have laid 
down the same doctrine.** Under this rule the burden of proof is 
on the insane person to show his incapachy, and upon the other 
party to show his ignorance of siich incapacity and his good faith 
and fair dealing.*^ 

The distinctions between executory and executed contracts how- 
ever, suggested in Molton v. Camroux, appear to have been repu- 
diated in England, and in that country the more recent rule appears 
to be that the contract of a lunatic is binding unless the other party 
knew of his condition.** 

The doctrine thus stated, however, is not to be applied as a tech- 
nical rule in all cases. "The cases will disclose," it has been said, 
''that one dealing with an insane person, and not knowing his con- 
' dition, or any facts to put him on his guard, will be protected by the 
courts of law and equity against such person's repudiating his con- 
tract on the ground of his mental incapacity. But the rule is not a 
technical one, to be relied on at all times and under all circumstanc- 
es. It is applied in each case only to prevent a wrong being done, 
and is based on the principle that 'the law will not permit the lu- 
natic's infirmity to be made an instrument of fraud.' " *• 

SB Molton T. Camroux, 2 Exch. 489, 4 Exch. 17. Bee "Insane Persons,** 
Deo. Dig. {Key-No.) | 75; Cent. Dig. | 11t5. 

■•Eaton V. Eaton, 37 N. J. Law, 108, 18 Am. Rep. 716; MUTUAL LIFE 
INS. CO. Y. HUNT. 79 N. T. 541, Throckmorton, Cas. Contracts, 153 ; Ingra- 
ham V. Baldwin. 9 N. T. 45; Boyer v. Berryman, 123 Ind. 451, 24 N. E. 249; 
Lincoln t. Buckmaster, 32 Vt 652; Young v. Stevens, 48 N. H. 136, 2 Am. 
Rep. 202, 97 Am. Dec. 592; Schaps y. Lehner, 54 Minn. 208, 55 N. W. 911; 
Grlbben y. Maxwell, 34 Kan. 8» 7 Pac. 584, 55 Am. Rep. 233 ; Abbott v: Creal, 
56 Iowa, 175, 9 N. W. 115; Shoultera v. Alien, 51 Mich. 529, 16 N. W. 888; 
Matthlessen & Weichers Refining Co. y. McMahon's Adm'r, 38 N. J. Law, 
536; Burnham y. Kid well, 113 111. 425; Scanlin v. Cobb, 85 m. 296; North- ^ 
western Ins. Co. y. Blankenship, 94 Ind. 535, 48 Am. Rep. 185; MiKUormick 
y. Littler, 85 IlL 62, 28 Am. Rep. 610 ; Reals y. See, 10 Pa. 66, 49 Am. Dec 
573; Riggan v. Green, 80 N. C. 236, 30 Am. Rep^ 77; Myers y. Knabe, 51 
Kan. 720, 33 Pac. 602 ; Harrison y. Otley, 101 Iowa, 652, 70 N. W. 724 ; Flaeh 
y. Gottschalk Co., 88 Md. 368, 41 AtL 908, 42 L. R. A. 745, 71 Am. St. Rep. 
418; McKenzie y. Donnell, 151 Mo. 431, 52 S. W. 214; Jamison y. Culligan, 
151 Mo. 410, 52 S. W. 224. If, howeyer, the lunatic has received no benefit 
under the contract, It has been said that he can recover what he has parted 
with, notwithstanding the other party's good faith. Lincoln y. Buckmas- 
ter, 32 Vt 658; Van Patton y. Beals, 46 Iowa, 63. Bee ^'Insane Persons,"' 
Dec. Dig. (Key-No.) § 75; Cent. Dig. | 125. 

Br ipock y. AUantic & N. C. R. Co., 158 N. C. 445, 74 8. E. 352. Bee ** In- 
sane Persons,** Deo. Dig. (Key-No.) ^ 4; Cent. Dig. | 6. 

•• Imperial Loan Co. y. Stone [1892] 1 Q. B. 599. See Anson, Cont (8t\i 
Ed.) 120. Bee **Insane Persons,** Deo. Dig. (Key-No.) | 75; Cent. Dig. | 125. 

•• Knowlton's Anson, Cont 116, note. 



§§ 118-121) RATIFICATION AND AYOIDANCS 231 



SAME— RATIFICATION AND AVOIDANCE 

118. The voidable contract of a person non compos mentis may be 

ratified or avoided by himself when sane, or by his guard- 
ian during insanity, or by his representatives or heirs aft- 
er his death. 

119. The right to disaffirm is personal, an^ neither the other party 

lior third persions can avoid it. 

'l20. In a few jurisdictions, although the other party did not know 

. of the insanity and the contract was fair, the consideration 

received by the insane perspn need not be returned as a 

condition precedent to avoidance if he is unable to return it. 

121. The contract can be avoided as against bona fide purchasers. 

The voidable contracts of a person non compos mentis may be 
ratified or disaffirmed by him when he becomes sane, or during a 
lucid interval ; *• or, during the continuance of his infirmity, by his 
committee or guardian ; *^ or, after his death, by his personal repre- 
sentative,** or his heirs.** The privilege is personal to the insane 
person, or those who thus represent him; and neither the other 
party to the contract nor third persons can avoid it.** Ratification 
or disaffirmance need not be in express words, but may be by con- 
duct, as in the case of ratification or disaffirmance by a person of a 

40 Allis y. Billings, 6 Mete. (Mass.) 416» 39 Am. Dec 744; Gibson t. Soper, 
6 Gray (Mass.) 279, 66 Am. Dec. 414; Arnold t. Iron Works, 1 Gray (Mass.) 
434; Turner v. Rusk, 53 Md. 65. Bee **Insane PerBone,-* Dee. Dig. (Key-Ifo!) 
I 79; CmU. Dig. || 1S8, HI. 

«i Moore v. Hershey, 90 Pa. 196; Halley y. Troester, 72 Mo. 73; McCHain 
T. Davis, 77 Ind. 419. Bee "/twane Persona,** Deo. Dig. (Key-No.) | 79; Cent. 
Dig. §1 1S8, HI. 

«a Beverley's Case, 4 Ck>ke, 123b ; Campbell v. Kuhn, 45 Mich. 613, 8 N. 
W. 623, 40 Am. Rep. 479; Schuff v. Ransom, 79 Ind. 458; Orr v. Mortgage 
Co., 107 Ga. 499, 83 S. E. 708. Bee "Insane Persons/' Deo. Dig. (Key-No.) § 
79; Cent. Dig. §§ 158, I4I. 

4s HOVET V. HOBSON, 68 Me. 451, 89 Am. Dec 705, Throckmorton, Cas. 
Contracts, 149; Allis v. BiUings, 6 Mete (Mass.) 416, 89 Am. Dec 744; Schuff 
T. Ransom, 79 Ind. 458. Bee "Insane Persons," Dec. Dig. (Key-No.) U ^t 79; 
Cent. Dig. H ^OS, 1S8, HI. 

44 Carrier v. Seara, 4 Allen (Mass.) 836^ 81 Am. Dec. 707; Allen v. Berry- 
hill, 27 Towa. 634. 1 Am. Rep. 309: ante, p. 228, note 28. Contra. Burke 
▼. Allen, 29 N. H. 106, 61 Am. Dec. 642. Sureties are liable on a note execut- 
ed by an insane person. Lee v. Yandell, 69 Tex. 34, 6 S. W. 665. Only privies 
in blood or legal representatives can avoid. Hunt v. Rabltoay, 125 Mich. 
137, 84 N. W. 69, 84 Am. St Rep. 668. Bee '^Insane Persons/* Dee. Dig. (Key- 
2fo.) I 79; Cent. Dig. U 1S8, 'HU 



232 CAPACITY OF PARTIES (Ch. 6 

contract made during infancy .*• And a contract once duly ratified 
may not afterwards be disaffirmed.** 

Return of Consideration on Avoidtmce 

In those jurisdictions where an insane person's contract is void- 
able, whether it is executed or not, and whether or not the other 
party acted in good faith and in ignorance of his infirmity, a person 
IS not required to restore, or offer to restore, the consideration re- 
ceived by him as a condition precedent to t\ie avoidance of a con- 
tract made by him while insane. "If the law required restoration of 
the price as a condition precedent to the recovery of the estate, that 
would be done indirectly which the law does not permit to be done 
directly, and the great purpose of the law In avoiding such con- 
tracts — the protection of those who cannot protect themselves — 
defeated." *^ 

As we have already seen, however, most courts do not allow an 
insane person to avoid his contracts where the other party acted in 
good faith, and in ignorance of his insanity, and cannot be placed 
in statu quo. Where this dpctrine prevails, if the contract was 
made in good faith and without knowledge of the insanity, the right 
to avoid is conditional on return of the consideration.** 

Avoidance as against Third Persons 

The fact that third persons have acquired an interest under* the 
contract of a person non compos mentis, in good faith, for value, 
and without notice of his infirmity, cannot defeat his right to avoid 

4B Gibson ▼. Soper, 6 Gray (Mass.) 283, 66 Am. Dec. 414; Arnold y. Iron 
Works, 1 Gray (Mass.) 434; Whitcomb v. Hardy. 73 Minn. 285, 76 N. w! 29. 
Cf. Beasley t. Beasley, 180 111. 163, 54 N. B. 187. Disaffirmance by action to 
avoid. Hull V. Louth, 109 Ind. 315, 10 N. E. 270, 58 Am. Rep. 405 ; Asbmead 
V. Reynolds, 127 Ind. 441, 26 N. B. 80. Ratification is established by evidence 
of conduct which can reasonably be accounted for only on the hyi>othesis 
that he had chosen to recognize the contract as binding upon him and to re- 
tain as his own the property he had acquired under it Newman ▼. Taylor 
(Tex. Civ. App.) 122 S. W. 425. See **lMane Persona," Dec, Dig. (Key-No.) 
I 79; Cent. Dig, S§ 1S8, 1^1. 

4e Newman v. Taylor (Tex. Civ. App.) 122 S. W. 425. Bee '^Insane Persons^'* 
Deo. Dig. (Key-No.) § 79; Cent. Dig. || 1S8, HI. 

«T Gibson V. Soper, 6 Gray (Mass.) 279, 66 Am. Dea 414. See, also, HOVET 
V. IIOBSON, 53 Me. 453, 89 Am. Dec. 705, Throckmorton, Gas, Contracts, 149. 
See **In8ane Persona," Deo. Dig. (Key-No,) § 79; Cent. Dig. f 138. 

*8 West V. Seaboard Air Line Ry., 151 N. C. 231, 65 S. B. 979 [cit. Clark on 
Contracts f2d Ed.) 185]. And see cases cited supra, note S6. Contract may 
be avoided upon return of the consideration notwithstanding the fairness 

of the other party and his want of notice of the insanity. Nutter v.^Des 
Moines Life Ins. Co. (Iowa) 136 N. W. 801. See "Insane Persons/* Deo. Dig. 
[Key-No,) | 73; Cent. Dig, f 125. 



§g 122-123) DRUNKEN PERSONS 233 

the contract.** This rule applies to deeds'* and negotiable instru- 
ments '^ as well as to other contracts, and it applies whether the 
contract be regarded as void or merely voidable. To protect bona 
fide purchasers in such^cases would be to withdraw protection from 
the insane person. 

DRUNKEN PERSONS 

122. A contract made by a person while he is so drunk as to be in- 

capable of understandiii^ its nature and effect is voidable 
at his option, except that — 

EXCEPTIONS — He is liable on contracts created by law, or 
quasi contracts. 

123. The rules as to ratification and avoidance are substantially the 

same as in the case o£ infants and insane persons, except 
that some (but not all) courts hold that the contract can- 
not be avoided as against a bona fide purchaser. 

The modern law places a drunken person, in respect of his ca- 
pacity to contract, in the same position as an insane person.** If 
his^ drunkenness is so excessive as to render him incapable of 'com- 
prehending the nature and effect of his cpntract, it is voidable at 
his option, and it is immaterial that his drunkenness was voluntary, 
and not procured through the circumvention of the Other party.** 
In the absence of fraud, slight intoxication does not affect the va- 

«• HOVEY T. HOBSON, 53 Ma 451, 89 Am. Dec. 705, Throckmorton, Gas. 
Contracts, 149 ; Hull v. Louth, 109 Ind. 315, 10 N. E. 270, 58 Am. Rep. 405 ; 
Long T. Fox, 100 IlL 43; Rogers v. Blackwell, 49 Mich. 192, 13 N. W. 512. 
See "Insane Persons," Dee, Dig. (Key-yo.) § 61; Cent Dig. | 94. 

BO HOVEY ▼. HOBSON, supra; Rogers t. BlackweU, 49 Mich. 192, 13 N. W. 
612. In North Carolina It Is held that the deed of a lunatic, duly recorded, 
cannot he avoided as against bona fide purchasers. Odom y. Rlddick, 104 N. 
C. 515, 10 S. E. 609, 7 L. R. A. 118, 17 Am. St. Rep. 686. See **Insane Per- 
sons,'* Deo. Dig. {Key-No.) | 61; Cent. Dig. § 94- 

oiSentauce ▼. Pool, 3 C. & P. 1; Anglo-Callfomlan Bank y. Ames (C C.) 
27 Fed. 727 ; Wlrebach's Ex'r y. Bank, 97 Pa. 543, 39 Am. Rep. 821 ; McClaln 
y. Davis, 77 Ind. 419. See **Insane Persons," Dec. Dig. (Key-No.) | 77; Cent. ' 
Dig. § ISl. 

B3 For history of the doctrine in regard to drunkenness as ground of In- 
capacity to contract, see Cameron-Barkley Co. y. Thornton Light & Power 
Co., 138 N. C. 365, 50 S. B. 695, 107 Am. St Rep. 532 ; Wright y. Waller, 127 
Ala. 557, 29 South. 57, 54 L. R. A. 440 and note. See **Contracts;* Dec. Dig. 
(Key-No.) § 92; Cent. Dig. §| 412, 4U; '*Drunkards," Dec. Dig. (Key-No.) 
I 6; Cent. Dig. § 7. 

»» BARRETT y. BUXTON, 2 Alkens (Vt) 167, 16 Am. Dec. 691, Tlirock- 
morton, Cas. Contracts, 155; Carpenter y. Rodgers, 61 Mich. 884, 28 N. \V. 
156, 1 Am. St Rep. 595; Miller v. Finley, 26 Mich. 254, 12 Am. Rep. 306; 



231 CAPACITY OF PABTIE8 (Ch. 6 

lidity of a contract. According to some of the older cases, the in- 
toxication must be so excessive as utterly to deprive the party of 
his reason and understanding;*^ but this doctrine has been very 
generally repudiated or modified, and the more reasonable, one 
adopted that if the party is so far deprived of his reason and un- 
derstanding as to render him incapable of understanding the nature 
and consequences of his contract, it is sufficient."* 

The contract, though voidable at the option of the drunken^ per- 
son, is binding on the other party, and cannot be attacked by third 
persons.** By the weight of authority, if a person has been judi- 
cially declared incapable of conducting his own affairs by reason 
of habitual drunkenness, and has been put in the custody and un- 
der the control of a committee or guardian, his contracts are abso- 
lutely void.*^ 

Gore y. Gibson, 13 Mees. ft W. 623; Caolklns t. Fry, 35 Conn. 170; Johns 
T. Fritchey, 39 Md. 258; Bush v. Breinig, 113 Pa. 310, 6 Atl. 86, 57 Am. Rep. 
469; Foss v. Hlldreth, 10 Allen (Mass.) 76; Matthews ▼. Baxter, L. R. 8 Exch. 
132; Shackelton v. Sebree, 86 111. 616; Bates v. Ball, 72 IlL 108; Mansfield 
V. Watson, 2 Iowa, 111; Warnock v. Campbell, 25 N. J. £q. 485; French's 
Heirs T. French, 8 Ohio, 214, 31 Am. Dec. 441 ; Cummlngs v. Henry, 10 Ind. 
109; Reynolds v. Waller's Heirs, X Wash. (Va.) 164; Newell v. Fisher, 11 
Smedes & M. (Miss.) 431, 49 Am. Dec. 66; Broadwater v, Darne, 10 Mo. 277; 
Phelan v. Gardner, 43 Cal. 306 ; Birmingham Ry., Light & Power Co. y. Hlnton, 
158 Ala. 470, 48 South. 546 (mental incapacity resulting from admlnistratipn 
of drugs and opiates). But see Relnskopf y. Rogge, 37 Ind. 207. In Hunter 
y. Tolbard, 47 W. Va. 258, 34 S. E. 737, it is held that the contract is yoid. 
It has been held that a person who, when sober, agrees to sign a contract, 
cannot ayail himself of intoxication at tbe time of signature as a defense. 
Page y. Krekey, 63 Hun, 629, 17 N. Y. Supp. 764. Cf. Youn y. Lamont, 56 
Minn. 216. 57 N. W. 47a 

s 4 Johnson y. Phifer, 6 Neb. 401; Harbison y. Lemon, 3 Blackf. (Ind.) 51, 
23 Am. Dec. 376 ; Belcher v. Belcher, 10 Yerg. (Tenn.) 121. See "Contracts,** 
Deo. Dig. (Key-No.) | 92; Cent. Dig. § 414. 

•» J. I. Case Threshing Mach. Co. y. Meyers, 78 Neb. 686, 111 N. W. 602, 
9 L. R, A. (N. S.) 970. Johnson y. Harmon, 94 XJ. S. 371, 24 L. Ed. 271; 
Cameron-Barkley Ck). y. Thornton Light & Power Co., 138 N. C. 365, 50 S. 
E. 695, 107 Am. St Rep. 532 [cit Oark on Contracts (2d Ed.) 186]; Van 
Wyck y. Brasher, 81 N. Y. 260; Conley y. NaUor. 118 U. S. 127, 6 Sup. Ct 
1001, 30 L. Ed. 112; Willcox y. Jackson, 51 Iowa, 208, 1 N. W. 513; Van 
Horn y. Keenan, 28 111. 445; Peck y. Gary, 27 N. Y. 9, 84 Am. Dec 220; 
Wright y. Waller, 127 Ala. 557, 29 South. 57, 54 L. R, A. 440 and note [quot 
Clark on Contracts (1st Ed.) pp. 274, 275]. And see cases cited in note. 
See "Contracts,** Dec. Dig. (Key-No.) | 92; Cent. Dig. | 414. 

»• Matthews y. Baxter, L. R. 8 Exch. 132; Eaton's Adm*r y. Perry, 29 Mo. 
96. See "Drunkards,** Dec Dig. (Key-No.) § 6; Cent. Dig. § 7. 

»T Wadsworth y. Sharpsteen, 8 N. Y. 388, 59 Am. Dec. 499 ; Philadelphia 
Trust, Safe & Deposit Ins. Co. y. Allison, 108 Me. 826, 80 AtL 833, 39 L. R. A. 
(N. S.) 89; Ralph y. Taylor, 83 R. L 603, 82 AU. 279. This is true eyen of a 



§§ 122-123) DRUNKEN PEBSONS 235 

A person who was drunk, but not under guardianship, when he 
entered into a contract, may either avoid or ratify it when sober ;•• 
and ratification or disaffirmance may be by conduct showing an in- 
tention to ratify or to avoid it, as by retention of the consideration, 
after becoming sober, or failure to disaffirm for an unreasonable 
time.** Having ratified the contract, he cannot retract and avoid 
it.*® On avoidance he must return or offer to return the considera- 
tion received by him,*^ though, if the consideration were wasted 
before becoming sober, this would probably not be required.** 

A drunken person is liable on contracts created by law, or quasi 
contracts, and is liable for necessaries furnished him.** 

As to whether drunkenness is a defense -against persons in good 
faith acquiring rights for value under the contract, — ^as, for in- 
stance, against the bona fide holder of a negotiable instrument, — 
the authorities are conflicting. Some courts hold that total, but 
not partial, drunkenness, is a defense,** but, by the decided weight 
of authority, not even total drunkenness is a defense against a hold- 
er in due course of a negotiable instrument.** 

negotiable Instmment in the hands of a bona fide purchaser for value. Wads- 
worth y. Sharpsteen, supra. This does not apply to contracts for neeessariea 
McGrllUs ▼. Bartlett, 8 N. H. 5G9; nor to a contract made before the ap- 
pointment of the committee. Appeal of Donehoo (Pa.) 15 Atl. 924. Bee 
** Drunkards,'* Deo. Dig. (Key-No.) | 6; Cent. Dig. | 7. 

•• See cases cited in note 63, supra. It may be avoided by his personal 
representatives. Wiggles^rorth v. Steers^ 1 Hen. & M. (Va.) 70, 8 Am. Dee. 
602. Bee *'ContracU," Dee. Dig. (Key-No^) | OH; Cent Dig. | |i2. 

B» Williams v. Inabnet, 1 Bailey (S. C) 848; Reinskopf y. Rogge, 37 Ind. 
207; Smith y. Williamson, 8 Utah, 210, 80 Pac. 758; Mansfield y. Watson, 2 
Iowa, 111. Bee **Contraot8," Deo. Dig. {Key-No.) | 92; Cent. Dig. | 412. 

•0 Matthews y. Baxter, L. R. 8 Exch. 132; Joest y. Williams, 42 Ind. 665, 
13 AuL Rep. 877. Bee 'Contracts;' Dec. Dig. (Key-No.) || 92, 97; Cent. Dig. 
U 412, 44S. 

•1 Joest y. Williams, 42 Ind. 565, 18 Am. Rep. 877; Birmingham Ry., Light & 
Power Co. y. Hinton, 158 Ala. 470, 48 South. 546. Bee '^Contract*,'* Dec. Dig. 
(Key-No.) H 92, 97; Cent. Dig. || 4^2, 442-446. 

•2 Thackrah y. Haas, 119 U. S. 499, 7 Sup. Ct 811. 80 U Ed. 486. Bee 
''Ctmtracte;* Dec. Dig. (Key-No.) I 97: Cent. Dig. 18 442--446; '* Cancellation 
of Instruments,'* Dec, Dig. (Key-No.) § 24; Cent. Dig. §§ SS-S8. 

•• Gore y. Gibson, 18 Mees. & W. 623 ; McCrillis y. Bartlett, 8 N. H. 569. 
Bee **Contracts,** Dec. Dig. (Key-No.) | 92; Cent. Dig. | 412. 

•^Caulkins y. Fry, 85 Conn. 170. Bee **Bill8 and Notes,** Dec Dig. (Key- 
No.) i S66; Cent. Dig. §| 945, 946. 

•ft State Bank y. McCoy, 69 Pa. 204, 8 Am. Rep. 246; MeSparran y. Neeley, 
91 Pa. 17 ; Smith y. Williamson, 8 Utah, 219, 80 Pac. 753. See Norton, Bms 
& N. (3d Ed.) 232; MUler y. Finley, 26 Mich. 249, 12 Am. Rep. 306. And see 
Page y. Krekey, 137 N. T. 307, 33 N. E. 311, 21 U R. A. 409, 83 Am. St Rep. 
781, holding that a guaranty is enforceable against a drunken person by an 
Innoc^it party to whom it is addressed and who has acted upon it to his 



238 CAPACITY OF PARTIES (Ch. 6 

pass, like other personalty of the wife, into the estate of the hus- 
band, but survive to the wife t if she outlives him, or pass to her 
personal representatives if she dies in his lifetime. 

The wife of a man who was civilly dead by reason of his being 
under conviction x)f a felony had the same capacity to contract as 
a feme sole/' The old common-law doctrine of civil death from 
conviction of a felony, however, is not recognized in this country ; 
but there are, in some states, statutes declaring that a man who is 
under a sentence of imprisonment in the penitentiary for life shall 
be deemed civilly dead.^' 

Where, however, a husband deserts his wife absolutely and com- 
pletely, and. leaves the state, it is generally held in this country that 
the wife may contract and sue and be sued as a feme sole/' At 
common law, however, such desertion must be more than a mere 
separation of the husband from his wife — it must be a voluntary 
abandonment of her, with intent to renounce the marital relation, 
so far as he can do so, and to leave his wife to act as a feme sole/* 

Same — In Equity 

In equity a married woman may have property settled upon her 
to her separate use, in which case she may dispose of it in the same 
manner as if she were a feme sole. In the exercise of this right, she 
may charge it with the liability to satisfy contracts made by her ; and 
an engagement or security entered into by her, showing an inten- 
tion to charge her separate property, will have that eflfect.** As 

T«Co. Lltt 132b; Hatchett v. Baddeley. 2 W. Bl. 1079, 1082; Carrol v. 
Blencow, 4 Esp. 27. Glyll death arose formerly In England also from out- 
lawry. As to other exceptions not material in this country, see Anson, Gont 
(8th Ed.) 122; Pollock, Cont (3d Ed.) 80. As to agreements of separation, 
see Tiffany, Pers. & Dom. Rel. IGS. See **Hu9band and Wife^" Deo. Dig. 
(KeV'^^o,) ii 65-S7; Cent. Dig, H 285-289. 

T7 See ante, p. i84.> 

T8 GREGORY V. PIERCE, 4 Mete. (Mass.) 478, Throckmorton Cas. CJon- 
tracts^ 159; Mead ▼. Hughes' Adm'r, 15 Ala. 141, 1 Am. Rep. 123; Krebs ▼. 
O'Grady, 23 AU. 726. 58 Am. Dec. 812; Cheek v. Bellows, 17 Tex. 613, 67 
Am. Dec. 680. See Rogers v. Phillips, 8 Ark. 366, 47 Am. Dea 727. See 
Mete Cont 98 et seq. A married woman whose husband Is an alien, and 
has never been in the United States, Is liable on her contracts. Levi v. 
Marsha, 122 N. C. 565, 29 S. E. 832. See "Husband and Wife," Dec Dig. 
(Key-No,) U 65-e7; Cent. Dig. §§ 285-289. 

T» GREGORY V. PIERCE, supra. See **Eu9band and Wife,** Dec Dig. 
(Key-No.) §§ 65-^7; Cent. Dig. §§ 285-^89. 

00 See Hulme v. Tenant, 1 Brown, Ch. 16; Shattock y. Shattock, L. R. 2 
Eq. 182; Jaques v. Methodist Church, 17 Johns. (N. Y.) 549, 8 Am. Dec. 447; 
Martin v. Dwelly, 6 Wend. (N. Y.) 9, 21 Am, Dea 245; Hollls v. Francois, 
5 Tex. 195, 51 Am. Dec. 760 ; Bradford v. Greenway, 17 Ala. 797, 52 Am. Dec. 
203; Dobbin v. Hubbard^ 17 Ark. 189, 65 Am. Dec. 425; Rogers v. Ward. 
8 Allen (Mass.) 387, 85 Am. Dec 710; Smith r. Thompson, 2 MacArthur 



g 124) MARRIED WOMEN 239 

said in an English case : "Courts of equity have, through the me- 
dium of trusts, created for married women rights and interests in 
property, both real and personal, separate and independent of their 
husbands. To the extent of the rights and interests thus created a 
married woman has, in courts of equity, power to alienate, to con- 
tract, to enjoy. She is considered a feme sole in respect of proper- 
ty thus settled or secured to her separate use," •* It is presumed in 
general that a contract or engagement made by a married woman 
in writing imports an intention to charge her separate estate, other- 
wise the writing would have no meaning. If not in writing, it 
must be proved that the engagement was entered into with such 
an intention.'* Under this rule, bonds, bills of exchange, and 
promissory notes of a married woman are presumptively payable 
out of her separate estate.** It is very generally held that, where 
a debt contracted by a married woman is for the benefit of her 
separate estate, it will be chargeable in equity for the payment 
thereof, without regard to her intention.** 

There are some limitations on the power of a married woman in 
respect to her separate property which should be noticed. She 

(D. C.) 291, 29 Am. Rep. 621; Priest ▼. Ck>ne, 51 Vt 495, 31 Am. Rep. 695; 
Wlllard ▼. Eastham, 15 Gray (Mass.) 828, 77 Am. Dec. 366 ; Johnson v. Cum- 
mins, 16 N. J. Eq. 97, 84 Am. Dec. 142 ; Bnrch ▼. Breckinridge, 16 B. Mon. 
(Ky.) 482, 63 Am. Dec. 553; Kantrowitz v. Prather, 31 Ind. 92, 99 Am. Dec. 
587; PhUllps v. Graves, 20 Ohio St 371, 6 Am. Rep. 675; Baker v. Gregory, 
28 Ala. 544, 65 Am. Dec. 86Q. See Tiffany, Pera. & Dom. Bel. 131 et seq. See 
"Huehand and Wife,'' Dec Dig. (Key-No.) § 152; Cent Dig. H 59^-602. 

•1 Johnson ▼. Gallagher, 3 De Gex, F. & J. 494. Bee "Husband and Wife,** 
Deo. Dig. (Key-No.) i 152; Cent. Dig. §§ 696-602. 

•* Leake, Gont 238; Kantrowlts ▼. Prather, 31 Ind. 92, 99 Am. Dec. 587; 
Bnich V. Breckinridge, 16 B. Mon. (Ky.) 482, 63 Aul Dec. 553; Litton ▼. 
Baldwin, 8 Hnrnph. (Tenn.) 209, 47 Am. Dec. 605; Johnson t. Cummins, 16 
N. J. E^ 97, 84 AuL Dec 142. See **Hueband and Wife,** Dec. Dig. (Key-No.) 
f 164; Cent. Dig. if 6U-648. 

•• Tnllett T. Armstrong, 4 Beav. 319; Phillips t. Grayes, 20 Ohio St 871, 
5 Am. Rep. 675; Burch t. Breckinridge, 16 B. Mon. (Ky.) 482, 63 Am. Dec. 
553 ; Dobbin y. Hubbard, 17 Ark. 189, 65 Am. Dec 425 ; Rogers t. Ward, 8 
AUen (Mass.) 387,. 85 Am. Dec 710. See "Husband and Wife,** Deo. Dig. 
(Key-No,) i§ 156, 164, 2S2; Cent. Dig. §| 608-6^, 641-648, 844. 

«« Wlllard Y. Eastham, 15 Gray (Mass.) 328, 77 Am. Dec 366; Rogers y. 
Ward, 8 Allen (Mass.) 387, 85 Am. Dec 710; James y. Mayrant, 4 Desaus. 
Eq. (S. C.) 591, 6 Am. Dec 630; Yale y. Dederer, 22 N. Y. 450, 78 Am. Dec. 
216; Johnson y. C^nmilns, 16 N. J. Eq. 97, 84 Am. Dec 142; Dyett y. Coal 
Co., 20 Wend. (N. Y.) 570, 32 Am. Dec 598; Dale y. Robinson, 51 Vt 20, 31 
Am. Rep. 6^; Patrick y. Llttell, 36 Ohio St 79, 38 Am. Rep. 552; McCor- 
mlck Y. Holbrook, 22 Iowa, 487, 92 Am. Dec. 400. Liability for medical at- 
tendance and funeral expenses. McClellan y. Fllson, 44 Ohio St 184, 5 N. E. 
861, 58 Am. Rep. 814. Bee "Husband and Wife;* Deo. Dig. (Key-No.) I 162; 
Cent. Dig. f | S22, 596, 600, 614, 6S7-640. 



240 CAPACITY OP PARTIES (Ch. 6 

cannot sue or be sued alone in respect of the separate estate. She 
does not acquire a sort of equitable status of capacity to contract 
debts in respect of her separate estate, without regard to when it 
is acquired. She can only bind such separate estate as is in her 
possession or control at the time the liabilities accrue. She cannot 
bind herself hor create liabilities in excess of her estate. Her cred- 
itor's remedy is not against her, but against her property/* 

Same — Disability Removed by Statute 

The common law has of late years been almost universally chang- 
ed by statutes both in this country and in England. The statutes 
vary so much in the different states that it would be impracticable 
to attenypt to state the law in detail. In general, however, it may 
be said that by the statutes married women have been given power 
to contract as if femes sole, subject to certain specified exceptions, 
such as contracts for the sale or conveyance of their real estate, or 
as surety for their husbands. 



CORPORATIONS 

125. A corporation, by reason of its artificial nature, can only con- 

tract through a duly-authorized agent. 

126. Formerly, with certain exceptions, it could only contract un- 

der its corporate seal; but now, unless restricted by its 
charter or by statute, it may contract in the^same manner 
as a natural person. 

127. The power of a corporation to enter into a contract is limited 

in respect of the subject-matter only by its charter or act 
of incorporation or by other statutes binding on it. Ex- 
cept as so restricted, it has the implied power to enter in- 
to any ccmtract which is reasonably incidental to the ac- 
complishment of the objects for which it is created. 

128. An attempted cont;;act, which is not within the powers of a 

corporation, is said to be ultra vires, and in many jurisdic- 
tions is held to be void, so that it cannot be enforced; but 
in other jurisdictions the defense of ultra vires is excluded 
when the contract has been performed by the party seek- 
ing to enforce it, and it would be inequitable to allow the 
defense. 

•• Plcard T. Hire, 6 Ch. App. 277. Bee **Eu8band and Wife,** Dee. Dig^ 
{Key-Vo.) i 215: Cent. Dig. % 78*. 



\ 



§§ 125-128) COBPOBATIONB 241 

A corporation can contract only by means of an agent. It "can- 
not act in its own person, for it has no person." ** It cannot act 
through one or any number of its members, merely as such, for, 
though they compose the corporation, they are not the corporation. 
It must act through an agent expressly authorized to act for it.'^ 

Mode of Contracting — Seal 

It was formerly the rule, subject to some exceptions, that a cor- 
poration could manifest its intention and act only by the use of 
its corporate seal;** but this doctrine is no longer recognized in 
this country. Unless the charter or act of incorporation or some 
statute provides otherwise, it need only use a seal where an individ- 
ual would be required to use one. In all cases where it is not ex- 
pressly so restricted, it may, like a natural person, contract under 
seal, or by writing not under seal, or orally.** Like a natural per- 
son, also, it can ratify any contract made by an agent which it 
could have authorized the agent to make,** and it may be liable on 
contracts implied as a fact from corporate acts,*^ and on quasi con- 
tractual obligations.*' 

If the charter or act of incorporation, or any other statute, ex- 
pressly prescribes a certain mode or form for entering into con- 
tracts, as is frequently the case, that form and mode must be strict- 

•« Per Lord Cairns, in Ferguson ▼. Wilson, 2 Ch. W. Bee '*OorporatUm$,** 
Dee, Dig. (Key-No.) H S98, m, W; Cent. Dig. H 1592-15^, leU-ieU, 1786, 
1787, 1807. 

•T Anonymous, 12 Mod. 423 ; Bank of Ireland y. Evans Cbaritles, 5 H. L. 
Gas. 889. Bee *' Corporations,'' Deo. Dig. (Key-Uo.) %% S8S, 406; Cent. Dig. Si 
1611-1614. 

••1 Bl. Comm. 475; Church v. Gas Co., 6 Adol. ft E. 846. Bee "Corpora 
UoM,'' Deo. Dig. (Key-No.) § 455; Cent. Dig. §| 1801-1809. 

«»Bank of Columbia y. Patterson, 7 Cranch, 2d9, 8 L. Ed. 851; Bank of 
United States ▼. Dandridge, 12 Wheat 64, 6 L. Ed. 552 ; Topping ▼. Blckford, 
4 Allen (Mass.) 120; Goodwin v. Screw Co., 34 N. H. 878; Plxley v. Railroad 
Co., 83 Cal. 183, 91 Am. Dec. 623 ; Regents of University of Michigan y. So- 
cle^, 12 Mich. 138; Board of Education of Illinois y. Greenbaum, 39 111. 609; 
Mott V. Hicks, 1 Cow. (N. Y.) 513, 13 Am. Dec. 530; Trustees of Christian 
Church of Wolcott v. Johnson, 53 Ind. 273 ; Clark, Corp. 156. Bee **Corpora' 
tionB," Deo. Dig. (Key-No.) § 455; Cent. Dig. {f 1801-1808. 

•0 Peterscm t. Mayor, etc., 17 N. Y. 450. Bee ^^Corporations,** Deo. Dig. 
(Key-No.) % 4^6; Cent. Dig. S§ 1596, 1702-1716. 

•1 Proprietors of the Canal Bridge v. Gordon, 1 Pick. (Mass.) 297, 11 Am. 
Dec. 170; Bank of Columbia v. Patterson, 7 Cranch, 299, 3 L. Ed. 351. Bee 
''Corporations,'* Dec. Dig. (Key-No.) f 451; Cent. Dig. { i787. 

•2 Bank of Columbia v. Patterson, 7 Cranch, 200. 3 L. Ed. 351; Hall t. 
Mayor of Swansea, 5 Q. B. 526 ; Jefferys v. Gurr, 2 Bam. ft Adol. 833 ; Pea- 
graves V. City of Alton, 13 111. 36(5; Trustees of Cincinnati Tp. v. Ogden, 5 
Ohio, 23. See ^'Corporations,'* Deo. Dig. ^K€y-No.) ff ^^7, 451; Cent. Dig. ff 
1786, 1787. 

CI.ABK Cont.(3d En.) — 16 



24Si CAPACITT OF PARTIES (Ch. 6 

ly followed.** The statutory provision, however, must be man- 
datory, and not merely directory.** 

What Contracts are Authorised 

The power of a corporation to enter into contracts is limited, in 
respect of the matter of the contract, by the charter or act of in- 
corporation, and by other statutes binding 'upon it. Being a crea- 
ture of the legislature, it may make only such contracts as are ex- 
pressly or impliedly authorized by the legislature.** It exists for 
no other purpose, and has no greater powers, than are conferred by 
its creation. 

By implication a corporation is given power, in the absence of 
express restriction in its charter, to enter into any contract which is 
necessary and usual in the course of business, or reasonably inci- 
dent to the accomplishment of the objects for which it was cre- 
ated.** 

To borrow money for carrying on its business, and to give a 
mortgage to secure its debts, to receive or give negotiable paper, to 
buy and sell land, are all acts within the power of the corporation 
if it is acting within its proper sphere, and in carrying out the pur- 
poses for which it was incorporated ; but not otherwise.*^ 

Ultra Vires Contracts 

A contract made by a corporation ultra vires — ^that is, beyond the 
powers of the corporation executing it — is in many jurisdictions 
held to be void, so that no action can be brought upon it.** In ac- 
cordance with this view, the contract being absolutely void, it may 

•s Head v. Insurance Co., 2 Cranch, 127, at page 169, 2 L. Ed. 229; BisseU 
Y. Spring VaUey Tp., 110 U. S. 162, 3 Sup. Gt 665, 28 L. Ed. 105. Bee **0or- 
porations;* Dec. Dig. iKey-No,) f 452; Cent. Dig. %l 1796-1805. 

•4 Southern Life Ins. & Trust Co. v. Lanier, 5 Fla. 110, 68 Am. De& 448; 
Witte V. Fishing Co., 2 Conn. 260; Bulkley v. Same, 2 Conn. 262, 7 Am. Dec 
271. See **Corporatione;' Dee. Dig. (Key-No.) | 452; Cent. Dig. f| 1196-1805. 

•» DOWNING V. MT. WASHINGTON ROAD CO., 40 N. H. 230, Throckmor- 
ton Ca& Contracts, 161. Bee ''Corporation;' Dee. Dig. (Key-No.) ff 449, 450; 
Cent. Dig. §i 1786, 1798-1795. 

••DOWNING V. MT. WASHINGTON ROAD CO., supra; MoryiUe t. So- 
ciety, 123 Mass. 129, 26 Am. Rep. 40; Union Bank ▼. Jacobs, 6 Humph. (Tenn.) 
615; London & N. W. Ry. Co. v. Price, 11 Q. B. D. 486; Simpson •r. Hotel Co., 
8 H. L. Cas. 712 ; Ft Worth City Co. ▼. Bridge Co., 151 U. S. 294, 14 Sup. Ct 
339, 88 L. Ed. 167. Bee ** Corporations,'' Dec Dig. (Key-No.) I 4^7; Cent, Dig. 
H 1786-1807. 

•T Clark, Corp 133 et seq. 

•• DOWNING V. MT. WASHINGTON ROAD CO., 40 N. H. 230, Throck- 
morton Cas. Contracts, 161 ; Bast Anglian Rys. Ca v. Railway Co., 11 C. B. 
776 ; Directors, eta, of Ashbury Railway Carriage ft Iron Co. v. Riche, L. R. 
7 H. L. 663 ; Pearce v. RaUroad Co., 21 How. 441, 16 L. Ed. 184 ; Thomas v. 
Railroad Co., 101 U. 8. 71, 26 U Ed. 960 ; Central Tranap. Co. r. Car Co., 139 



S§ 125-128) 



GOBFORATION8 



243 



not even be ratified.** In many states, on tht other hand, the de- 
fense of ultra vires is in such cases excluded, whether interposed for 
or against the corporation, on the ground of an equitable estoppel, 
when the contract has been wholly or partly performed on the part 
of the plaintiff, and it would be inequitable to allow the defense.^®* 
And as a rule, in all jurisdictions, where either party has received 
benefits under the contract in the form of money, property, or serv- 
ices, an action quasi ex contractu may be maintained to recover 
it.*^* A discussion of the law of corporations in relation to con- 
tracts is, however, beyond the scope of this book.*®* 

C. S. 24, 11 Sup. Ct 478, 35 U Ed. G5 ; California Nat Bank y. Kennedy, 167 
U. S. 362, 17 Sup. Ct 831, 42 L. Ed. 198. See "Corporatione,** Dee. Dig. {Key- 
No.) I 487; Cent. Dig, §§ 1898-1898. 

••DOWNING V. MT. WASHINGTON ROAD CO., Bupra. Bee **Oorpora- 
tioru;* Deo. Dig. (Key-No.) f 487; Cent. Dig. if 189S''1898. 

100 Whitney Arms Co. y. Barlow, 63 N. Y. 62, 20 Am. Bep. 504; Holmes & 
Griggs Mfg. Co. T. Metal Co., 127 N. X. 252, 27 N: £. 831, 24 Am. St Rep. 448; 
Denver Fire Ins. Co. y. McClelland, 9 Colo. 11, A Pac. 771, 59 Am. Rep. 134 ; 
Bradley t. Ballard, 55 111. 413, 8 Am. Rep. 656 ; Day y. Buggy Co., 57 Mich. 
151, 23 N. W. 628, 58 Am. Rep. 852 ; Wright y. Hughes, 119 Ind. 824, 21 N. 
E. 907, 12 Am. St Rep. 412; Seymour y. Society, 54 Minn. 147, 66 N. W. 907; 
Manchester & L. R. Co. y. Railroad Co., 66 N. H. 100, 20 Atl. 388, 9 L. R. A. 
689, 49 Am. St Rep. 582 ; Union Hardware Co. y. Manufacturing Co., 58 Conn. 
219, 20 AtL 455. Bee **OorporatUm9;* Dee. Dig. (Key-No.) f 481; Cent. Dig. ff 
1898-1898. 

101 Daj^ Y. Buggy Co., 57 Mich. 146, 23 N. W. 628, 68 AnL B^. 862; DaYls 
Y. Railroad Co., 131 Mass. 258, 41 Am. Rep. 221 ; Logan County Nat Bank y. 
Townsend, 139 U. S. 67, 11 Sup. Ct 496, 35 I4. Ed. 107 ; Nashua & U R. Corp. 
Y. Railroad Corp., 164 Mass. 222, 41 N. E. 268, 49 Am. St Rep. 454 ; Anthony 
Y. Machine Co., 16 R. I. 571, 18 AtL 176, 5 U R. A. 575 ; Moore Y. Tanning Co., 
eo yt 459, 16 AtL 114. Bee ''Corporationa;* Dee. Dig. (Key-No.) 1 187; Cent ' 
Dig. U 1898-1898. 

10* See Clark, Corp. 170 et seq. 



2iA BIDALITZ OF CONSENT * (Ch. 1 



CHAPTER VII 

BBALITY OF CONSENT 

128. In GeneraL 

130-181. Biistake. 

132-184. Effect— Remedies. 

135-138. BiisrepresentatioiL 

139. Fraud. 

140-141. Effect— Remedleii 

142-144. Duress. 

145-140. Undue Influence. 



IN GENERAL 

129. The mutual consent which is essential to every agreement 
must be real. There may be no real consent* and there- 
fore no contract, because of 

(a) Mistake, 

(b) Misrepresentation, 

(c) Fraud, 

(d) Duress, or 

(e) Undue influence. 

The next feature in the formation of contract to be considered 
IS genuineness or reality of consent. If we have an apparent agree- 
'ment possessing the element of form or consideration, or both, 
and made between parties capable of contracting, we must ask 
whether tl\e consent of both or either of the parties was given 
under such circumstances as to make it no real expression of 
their intention. 

There may be various causes for unreality of consent: (1) 
The parties may not have meant the same thing; or one or both, 
while meaning the same thing, may have formed untrue conclu- 
sions as to the subject-matter of the agreement. This is Mistake. 
(2) One of the parties may have been led to form untrue con- 
clusions respecting the subject-matter of the agreement by state- 
ments innocently made, or facts innocently withheld by the other. 
This is Misrepresentation. (3) These untrue conclusions may 
have been induced by intentional misrepresentations or active con- 
cealment by the other party, or intentional concealment where 
there was a duty to disclose, for the purpose of deceiving. This 
is Fraud. (4) The consent of one of the parties may have been 



/ 



%% 130-131) MI8TAKB 243 

extorted from him by the other by actual or threatened violence 
This IS Duress. (5) Circumstances may have rendered one of 
the parties morally incapable of resisting the will of the other, so 
. that his consent was no real expression of intention. This is 
Undue Influence.* 

MISTAKE 

130. Mistake is where the pai^ties did not mean the same thing, or 
where one or both, while meaning the same thing, formed 
untrue conclusions as to the subject-matter of the agree- 
ment. 

131.. Mistake avoids the contract in the fbllowing cases: 

(a) Where the mistake is as to the nature of a written contract. 

the execution of which is induced or procured by mis- 
representation ; 

(b) Where the mistake is as to the identity of the person with 

whom the contract is made; 
(c)<^ Where the subject-matter of the contract* unknown to the 

parties, does not exist; 
(d) Where two things have the same name, and the parties, 

owing to the identity of names, do not mean the same 

subject-matter. v 

It must be borne in mind that we are here dealing with mistake 
of intention, and not mistake of expression. The parties may be 
genuinely agreed on the terms of their contract, but the terms 
may, by mistake, be so expressed as not to convey their meaning. 
In these cases they may be permitted to explain the contract, or 
the court may correct the mistake. This is mistake of expression, 
and pertains to the interpretation of contracts, with which we shall 
deal in a subsequent chapter.* 

The almost universal rule is that a man is bound by an agree- 
ment to which he has expressed his assent in unequivocal terms, 
uninfluenced by falsehood, violence, or oppression. If he has 
-exhibited all the outward signs of agreement, the law will hold 
that he has agreed. As a rule, a person cannot avoid his contract 
simply by showing that he has made a mistake.* There are, how- 

1 Anson, Ck)nt (8th Ed.) 127. * See post, eta. X. 

• O. H. Young Co. t. Sprinjsrer, US Biinn. 882, 129 N. W. 773, holding mls- 

^ take without effect where It was the mistake of only one party and was not 

induced by, or actually known to, the other. To the same effect, see Tatum 

▼. Coast Lumber Co.. IC Idaho, 471, 101 Pac. 957, 23 L. B. A. (N. S.) 1109; 

Btelnuieyer y. Schroeppel, 226 111. 9, 80 N. B.'564, 10 L. B. A. (N. S.) 114, 117 



246 rbalit; of consent (Ch. 7 

ever, exceptions to this general rule in the case of mutual mistake 
of the parties, and of mistake of one party induced by, or known 
to, the other. The latter is a species of fraud, and is accordingly 
reserved for treatment .under that topic* 

"Mutual mistake," as defined in a Minnesota case,* "consists 
in a clear showing of a misunderstanding, reciprocal and common 
to both parties, in respect to the terms and subject-matter of the 
contract, or some substantive part thereof." It should not be 
understood that mutual mistake is always sufficient to render a 
contract void. Where the mistake is in regard to an immaterial 
matter, or a mere matter of inducement, it is without effect upon 
the validity of the contract.* But where the mistake goes to the 
essence of the contract, it renders the contract void for the want 
of a meeting of the minds of the parties, or because the apparent 
agreement is upon the assumption of that which is not true. The 
circumstances under which mistake renders the contract void will 
now be enumerated and explained. 

Mistake as to the Nature of the Transaction — Written Instrument 

There are cases in which a contract is void because of a mis- 
take as to the nature of the transaction. Such cases arise in the 
execution of written instruments, and must arise almost of neces- 
sity from misrepresentation, either of a third person or of the other 
party. A fnan who has executed an instrument cannot avoid its 
operation by saying that he did not put his mind to it or that he 
did not suppose it would have any legal effect^ He must have 
been induced to execute it by some deceit or misrepresentation 

Am. St Rep. 224 ; Brown v. Levy, 29 Tex. dv, App. 889, 69 S. W. 255. Bee 
'^Contracts;* Deo. Dig. {Key-No), f 9S; Cent. Dig. %% 415-419. 

« See post, p. 270. 

8 C. H. Young Co. v. Springer, 113 Minn. 882, 129 N. W. 773. See "Co»- 
tracts;* Dec, Dig. (Key-No.) | 9S; Cent. Dig. fi 415-419. 

• Darnell v. Dolan (Tex. Civ. App.) 132 S. W. 857; Stewart v. Tlconic Nat 
Bank, 104 Me. 578, 72 AtL 741. See *'Contracti,*' Dec Dig. {Key-No.) | 9S; 
Cent. Dig. fS 4^5-419. 

T Hunter v. Walters, L. R. 7 Ch. 81 ; Cannon r. lindsey, 85 A}a. 198, 3 
South. 676, 7 Am. St Rep. 38. And see Kennerty v. Etiwan Phosphate Co., 
21 S. C. 226, 53 Am. Rep. 660 ; Little v. Little, 2 N. D. 175, 49 N. W. 736 ; 
Quimby v. Shearer, 56 Minn. 534, 58 N. W. 155 ; Campbell v. Van Houten, 44 
Mo. App. 231; Llska v. Lodge, 112 Mich. 635, 71 N. W. 171; Royston v. 
MUler CC. C.) 76 Fed. 50 ; Chicago, St P., M. & O. Ry. Co. v. Belllwlth, 83^ 
Fed. 437, 28 CCA. 358; MuUer v. Kelly (C C) 116 Fed. 545; Sheneberger v. 
Union Cent Life Ins. Co., 114 Iowa, 578, 87 N. W. 493, 55 L. R. A. 209; Mar- 
tin V. Smith, 116 Ala. 639, 22 South. 917 ; Bostwick v. Mutual Lite Ins. Co.,. 
116 Wis. 392, 89 N. W. 538, 92 N. W. 246, 67 L. R. A. 705 ; Flvey v. Pennsyl- ' 
vania R. Co., 67 N. J. Law, 627, 52 Atl. 472, 91 Am. St Rep. 445w Bee "Con- 
tracts,'* Deo. Dig. {JS:ey-No.) i 93; Cent. Dig. U 415-419- 



S§ 130-131) MI8TAKB 247 

ivhich ordinary diligence could not penetrate. Thus, where a man 
^who is illiterate, or blind, or ignorant of the language, executes 
a deed, which is misread or misdescribed to him by the other party 
or a stranger, and the deed is in fact a different instrument from 
that which he was led to believe it to be, the deed is void.* But 
if a man can read and does not read the document which he sig^s,* 
or if, being unable to read, he signs without having it read,** he 
will not be heard to say that the contract is void, although in 
such case, if he was induced to sign it by fraudulent misrepresen- 
tation as to the character or terms, it is generally held that the 
contract is voidable.** 

In a leading case, the acceptor of a bill of exchange had induced 
a person to indorse it by telling him that it was a guaranty, and 
the defendant signed on the faith of the representation without 
seeing the face of the bill. It was held that, if the defendant was 
not guilty of any negligence in so signing, the bill did not bind 
him, even in the hands of a bona fide purchaser for value. It 
seems "plain, on principal and on authority," said the court, "that 
if a blind man, or a man who cannot read, or who for some reason 
(not implying negligence) ' forbears to read, has a written con- 
tract falsely read over to him, the reader misreading^to such a 
degree that the written .contract is of a nature altogether different 
from the contract pretended to be read from the paper which the 
blind or illiterate man afterwards signs, then, at least if ther^ be 
no negligence, the signature so obtained is of no force. And it 
is invalid, not merely on the ground of fraud, where fraud exists, 
but on the ground that the mind of the signer did not accompany 

• Thoroaghgood'B Case, 2 Coke, 9; McGinn v. Tobey, 62 Mich. 252, 28 N. 
W. 818, 4 Am. St Rep. 848 ; Schuylkill Co. v. Copley, 67 Pt. 386, 5 Am. Rep. 
441; Rockford, R. I. & St L. R. Co. v. Sbunick, 65 111. 223; Burlington 
Lumber Co. v. ^Lumber Co., 100 Iowa, 469, C9 N. W. 558; Sibley y. Holcomb, 
104 Ky. 670, 47 S. W. 765. Bee ^'Contracts," Deo, Dig. {Key-No,) I 9S; Cent. 
Dig. i§ 41^4X9. 

• Upton y. Tribilcock, 91 U. S. 46, 23 L. Ed. 203 ; In re Greenfield's Estate, 
14 Pa. 489; J. I. Case Threshing Machine Co. v. Mattingly, 142 Ky. 581, 134 
S. W. 1131. And see cases cited supra, note 7. See '^ContractSf"* Dec, Dig. 
(Key-yo.) i 93; Cent, Dig. i| 415-^9- 

10 Chicago, St P., M. & O. Ry. Co. v. Belliwith, 83 Fed. 437. 28 C. O. A. 
858; Muller v. Kelly (C. 0.) 116 Fed. 545. See **Contract8,*' Deo. Dig. (Key- 
Ifo.) I 9S; Cent. Dig. §| 415-419. 

11 Maxfield y. Schwartz, 45 Minn. 150, 47 N. W. 448, 10 L. R. A. 606 ; 
Standard Mfg. Co. v. Slot, 121 Wis. 14, 98 N. W. 923, 105 Am. St Rep. 1016 ; 
Griffin y. Roanoke Railroad & Lumber Co., 140 N. C. 514, 53 S. E. 307; 6 
L. R. A. (N. S.) 463 ; Western Mfg. Co. y. Cotton & Long, 126 Ky. 749, 104 
8. W. 768» 12 L. R. A. (N. S.) 427. And see post, p. 284. See ^VontractB," 
Deo. Dig. (Key-Vo.) % 98; Cent. Dig. i 447. 



248 BBALITT OF CONSENT (Ch. T 

the signature; in other words, that he never intended to sign,, 
and therefore, in contemplation of law, never did sign, the con-^ 
tract to which his name is appended." ** 

In this case the contract was void, and therefore could not be 
enforced even by a bona fide holder/ And the case would have 
been the same had the execution been obtained, without negligence 
on the part of the signer, by the fraud of the other party.** In that 
case also the minds of the parties never meet, for the defrauded 
party thinks he is signing one instrument, and the defrauding 
party is aware that the signer is signing a difFdrent instrument.' 
The case is, in effect, one of mistake, induced by fraud. If the 
ground of avoidance is the fraud of the other party, whereby the 
signer was induced to execute the instrument understandingly, 
Jhe misrepresentation not relating to the character of the instru- 
ment, the contract, as we shall' see, would be voidable, and not 
void.** 

The absence of negligence is strongly dwelt upon by the court 
in the case above stated, and the jury had expressly negatived 
its existence. A person cannot assert the invalidity of a note or 
bill of exchange or deed, as against a bona fide purchaser for 
value, on the ground that through fraud and i circumvention he 
was induced to sign, not knowing the nature of the instrument, 
unless he shows that he was not guilty of negligence; for if he 
was negligent he will be estopped from asserting the invalidity. 
If he shows this, but not otherwise, he may assert the invalidity 

la FOSTER ▼. MACKINNON, L. R. 4 C. P. 704, 88 L. X C. P. N. 8. 810,. 
20 Ifc T. N. S. 887, 17 Wkly. Rep. 1105, Throckmorton, Cas. Contracts,. 
166. And see Gibbs ▼. linabury, 22 Mich. 479, 7 Am. Rep. 675; Kagei 
V. Totten, 59 Md. 447; Whitney v. Snyder, 2 Lans. (N. Y.) 477; Cllne ▼. 
Guthrie, 42 Ind. 227, 13 Am. Rep. 867; Walker v. Ebert, 29 Wis. 104, 9 Am. 
Rep. 548; Puffer v. Smith. 57 111. 527; Soper v. Peck, 61 Mich. 563. 17 N. W. 
57 ; De Camp v. Hamma, 29 Ohio St. 467 ; Trambly v. Rlcard, 130 Mass. 259 ; 
Corby v. Weddle, 57 Mo. 452; Detwller v. Blsh, 44 Ind. 70; Baldwin v. 
Bricker, 86 Ind. 221; Hewitt ▼. Jones, 72 III. 218; Bowers ▼. Thomas, 62: 
Wis. 480, 22 N. W. 710; Schaper v. Schaper, 84 lU. 608; Vanbnint v. Slnjf- 
ley, 85 IlL 281; Esterly v. Eppelshelmer, 73 Iowa, 260, 34 N. W. 846; Wood 
y. Locfe Co., 96 Oa. 120, 22 S. E. 909. See "BUU and yotei,'' De(\ Dig, {Key- 
No.) i lOS; Cent, Dig. {§ 2S8^iO. 

i» McGinn v. Tobey, 62 Mich. 252, 28 N. W. 818, 4 Am. St Rep. 848 ; Ester- 
ly V. Eppelshelmer, 73 Iowa, 200, 34 N. W. 846 ; Green v. Wllkle, 98 Iowa, 74, 
66 N. W. 1046, 36 L. R. A. 434, 60 Am. St. Rep. 184 ; Llndley v. Hofman, 22 
Ind. App. 237, 63 N. E. 471; Yakima Valley Bank v. McAllister, 87 Wash. 
566, 79 Pac. 1119, 1 L. R. A. (N. S.) 1075, 107 Am. St Rep. 823 (signature- 
obtained by trick). And see cases cited In note 12, supra, and note 15, Infra.. 
See '^Bills and Notes,** Deo. Dig. {Key-No.) ^ 373; Cent. Dig. || vdtHfW. 

14 Post, p. 205. 



^§ 130-131) MISTAKS 249 

4)f the instrument, even as against a bona fide purchaser.*' There 
are some cases which hold that a negotiable instrument cannot 
be avoided in the hands of a bona fide holder, even though there 
was no negligence; " but the great weight of authority is in favor 
of the rule above stated. 

Mistake as to the Person with Whom the Contract is Made 

A mistake as to the person with whom the contract is made may 
avoid it; as, for instance, where a contract is made with one 
person under a belief that it is being made with another. Where 
a man intends to contract with one person, another cannot make 
himself a party to the contract by substituting himself; for, in 
the first place, a man, in entering into a contract, looks to the 
credit and character of the person with whom he supposes he is 
contracting,*' and, in the second place, the person who thus sub- 
stitutes himself is never present in the mind of the other party, 
and the latter, therefore, does not consent to a contract with him. 
Where a man imitated another's signature, and thereby induced 
persons to supply him with goods under the belief that they were 
supplying the person whose signature was imitated, it was held 
that there was no contract with the person so procuring the goods. 
*'Of him," says Lord Cairns, "they knew nothing, and of him they 
never thought With him they never intended to deal. Their 
minds never even for an instant of time rested upon him, and as 
between him and. them there was no consensus of mind which 
could lead to any agreement or contract whatever. As between 

IS Chapman y. Rose, 66 N. T. 138, 15 Am. Rep. 401 ; Abbott v. Rose, 62 Me. 
194, 16 Am. Rep. 427; Taylor v. Atchison, 54 III. 196, 5 Am. Rep. 118; Mack- 
ey V. Peterson, 29 Minn. 298, 13 N. W. 132, 43 Am. Rep. 211 ; Upton ▼. Tribll- 
cock, 91 U. S. 60, 23 L. E<L 203 ; Oavagan y. Bryant, 83 lU. 376 ; Leach v. 
Nichols. 55 III. 273 ; Ross v. Doland, 29 Ohio St 473 ; Douglass v. Matting, 
29 Iowa, 498, 4 Am. Rep. 238; Fayette Go. Say. Bank ▼. Steffes, 54 Iowa, 
214, 6 N. W. 267 ; MHlard y. Barton, 13 R. I. 601, 43 Am. Rep. 51 ; Baldwli) 
y. Barrows, 86 Ind. 351; Putnam y. Sulliyan, 4 Mass. 45, 3 Am. Dec. 206; 
Ort v. Fowler, 81 Kan. 478, 2 Pac 580, 47 Am. Rep. 501 ; Weller's Appeal, 
103 Pa. 594 ; Johnston y. Patterson, 114 Pa. 398, 6 Atl. 746 ; Shirts ▼. Oyer- 
John, 60 Mo. 305 ; Citizens* Nat Bank y. Smith, 55 N. H. 593. And see cases 
cited supra, note 13. See *'BilU and Notes" Dec, Dig. (Key-yo.) § S73; Cent. 
Dig. IS 966-970. 

i« First Nat Bank v. Johns, 22 W. Va. 520, 46 Am. Rep. 506 (collecting 
cases). Bee **Bills and Notes," Dec. Dig, (Key-yo.) f S7S; Cent, Dig. |f 966- 
$70; "Contracts,** Dec. Dig. (Key-No,) f 9S; Cent, Dig. {§ 415-419. 

IT Humble y. Hunter, 12 Q. B. 311 ; BOSTON ICE CO. v. POTTER, 123 
Mass. 28, 25 Am. Rep. 9, Throckmorton, Cas. Contracts, 305. Bee **Con^ 
tracts,** Dec. Dig. {Key-No,) % 93; Cent. Dig. H 415-419. 



1 . 



r « 

1 



25B REALITY OF CONSENT (Ch. 7 

him and them there was merely the one side to a contract, where, 
in order to produce a contract, two sides would be required." *• 

In this case the mistake was induced by fraud, but an innocent 
mistake may produce Jthe same result Thus, where an order for 
goods was sent to a particular person, and a man who had suc- 
ceeded to his business filled the order without giving notice oFtR? 
change, it was held that he could not recover the price of the 
goods. "In order to entitle_the plaintiff to recbver7 it wa s ^a id, 
^TR Ipust show that there was a contract with himself." ^* And 
on the same principle, if a man sells goods to another, represent- 
ing that he is the owner, and the other party intends to buy from 
him, there is no contract with the real owner, who was the undis- 
closed principal of the seller, for "every man has a right to elect 
what parties he will deal with." *• So, also, if a man obtains goods 
from another by falsely representing that he is the agent of another 
person, to whom the owner of the goods thinks he is selling them, 
the sale is void.** To render the sale void, however, there must 

!• CUNDY v. LINDSAY. Ii. R. 8 App. Cas. 465, 47 L. J. Q. B. 481, 88 L. 
T. Rep. N. S. 573, 26 Wkly. Rep. 406, Throckmorton, Caa Contracts, 169; 
post, p. 296b Bee "Contracts," Dec. Dig. i^ey-No.) | 9S'; Cent. Dig. %\ US- 

419. 

1* Boulton ▼. Jones, 2 Hurl. & N. 564« And see BOSTON lOB CO. t. POT- 
TER, 123 Mass. 28, 25 Am. Rep. 9, Throckmorton, Cas. Contracts, 805 ; Ran- 
dolph Iron Co. y. EUiott, 84 N. J. Law, 184; Gregory ▼. Wendell, 40 Mich. 
443; Barnes ▼. Shoemaker, 112 Ind. 512, 14 N. E. 367; Winchester v. How- 
ard, 9T Mass. 803, 93 Am. Dec. 93 ; Fox ▼. Tabel, 66 Conn. 397, 34 AtL 101. 
See "Contracts," Dec Dig. {Key-No.) ^ 9S; Cent. Dig. ff US-US. 

ao Winchester y. Howard, 97 Mass. 808, 93 Aul Dec. 93 ; Mitchell ▼. Rail- 
ton, 45 Mo. App. 273. It is not meant that an agent must always disclose 
his agency. An agent may sell the property of his principal without dis- 
closing that he acts as agent, or that the property is not his own; and the 
principal may maintain an action In his own name to recover the price. If 
the purchaser says nothing on the subject, he is liable to the unknown prin- 
cipal. Huntington y. Knox, 7 Cush. (Mass.) 371. See Tiffany, Ag. 804-807. 
See "Contracts," Dec Dig. (Key-Vc) { 9S; Cent, Dig, §§ ilS-\l9. 

ai Hardman v. Booth, 1 Hurl. & C. 803 ; Hollins v. Fowler, L. R. 7 H. L. 
757; Hamet v. Letcher, 37 Ohio St 356, 41 Am. Rep. 519; Hentz y. Miller, 
94 N. Y. 67 ; Barker y. Dinsmore, 72 Pa. 427, 13 Am. Rep. 697 ; Edmunds v. 
Transportation Co., 135 Mass. 283; McCrillls y. Allen, 57 Vt 505; Peters 
Box &, Lumber Co. T. Lesh, 119 Ind. 98, 20 N. E. 291, 12 Am. St Rep. 367; 
Fifer y. Clearfield & Cambria Coal & Coke Co., 103 Md. 1, 62 AU. 1122 (pur- 
chase by individual in name of fictitious corporation supposed by the seller 
to have a legal existence). So, also, where a person obtains goods by falsely 
representing that he is member of a firm, and gives in payment a forged 
check of the firm. Alexander y. Swackhamer, 105 Ind. 81, 4 N. E. 433, 5 N. 
E. 908, 55 Am. Rep. 180; Moody y. Blake, 117 Mass. 23, 19 Ahl Rep. 394. 
So, also, where a person obtains goods by falsely representing that he is 
agent of an undisclosed prindpaL Rodliff r. Dollinger, 141 Mass. 1« 4 N. SL 



§§ 130-131) MISTAKB 251 

be a false representation that the agency exists, and not merely 
belief in its existence on the part of the seller, and intent to sell 
to the supposed principal.** . 

Mistake as to Subject-Matter of Contract 

If a man knows the nature of the transaction, and the party with 
whom he is entering into legal relations, it is, for the most part, 
his own fault if the subject-matter of the contract — the thing 
contracted for and the terms of the bargain — is not what he sup- 
posed. "If, whatever a man's real intention may be, he so conducts 
himself that a reasonable man would believe that he was assent- 
ing to the terms proposed by the other party, and that other party, 
upon that belief, enters into the contract with him, the man thus 
conducting himself would be equally bound as if he had intended 
to agree to the other party's terms." *• And so, if the parties are 
agreed in clear terms, and one of them does not get what he antic- 
ipates under the contract, this is, if anything, failure of perform- 
ance, and not mistake. Cases cited in illustration of the rule that 
a man is not bound to accept a thing substantially different from 
that which he bargained for ** have nothing to do with the forma- 
tion of contract, and we must keep these questions of mistake and 
so-called failure of consideration clearly apart. 

Mistake as to the subject-matter of a contract will only avoid 
it at -law in a few cases. Equity, however, may grant relief in 
cases where the law may afford no remedy.** 

Same — Mistake as to Existence of Subject-Matter 

If the agreement is in respect of a thing which, unknown to 
both parties, does not exist at the time of entering into the con^ 
tract, this goes to the very root of the matter, and avoids the 
contract. It seems that this rests upon the ground that the exist- 
ence of the subject-matter is a condition of the contract, rather than 
upon the ground of mutual mistake.** The subject belongs with 

805, 55 Am. Rep. 439. See, also, Paine' ▼. Loeb, 96 Fed. 164, 37 O. C. A. 434; 
post, p. 296. See "Contracts,'' Dec, Dig. {Kev*No,) | 9S; Cent. Dig. |§ 4i5- 

as Stoddard ▼. Ham, 129 Mass. 383, 87 Am. Rep. 369. Bee **Contract8*' 
Deo. Dig. (Key-No.) | 98; Cent. Dig. §{ US-UO. 

*« Per Blackburn, J., in Smith v. Hughes, L. R. 6 Q. B. at page 607. See 
**Contracts," Deo. Dig. {Key-No.) § 93; Cent. Dig. §| 415^419. 

*« Gompertz ▼. Bartlett, 2 El. & Bl. 849 ; Couder r. Hall, 26 B. (N. S.) 22. 
See "Contracts,'' Dee. Dig. (Key-No.) § 98; Cent. Dig. ff 415-^19. 

«» See Fritzler v. Robinson, 70 Iowa, 500, 31 N. W. 61 ; Geib ▼. Reynolds, 
85 Minn. 331, 28 N. W. 923 ; Fleetwood v. Brown, 109 Ind. 567, 9 N. B. 352, 11 
N. B. 779; Thwing ▼. Lumber Co., 40 Minn. 184, 41 N. W. 815. Bee "Con- 
tractsr Dec. Dig. (Key-No.) § 98; Cent. Dig. | 447. 

t0 See Anson, Cont (8th Ed.) 135; PoUock, Cont (8d Ed.) 886, 455. 



252 RBALITT OF CONSENT (Ch. T 

impossibility of performance; but, inasmuch as the thing agreed 
upon has ceased to be possible before the agreement, such im- 
possibility prevents a contract from^ ever arising; and does not 
operate, as impossibility arising subsequent to the agreement will 
sometimes operate, as a form of discharge. One of the leading 
English cases on this subject arose out of a sale of a cargo of 
corn which was s\ipposed by the parties, at the time of the sale, 
to be on its voyage to England, but which, in fact, having become 
heated on the voyage, had been unloaded and sold. It was held 
that the contract was void, inasmuch as it "plainly imported that 
there was something which was to be sold at the time of the 
contract, and something to be purchased," whereaS' the object 
of the sale had ceased to exist.*^ So, also, where a person purchased 
an annuity which, at the time of the purchase, had ceased to exist 
owing to the death of the annuitant, it was held that he could 
recover the price which he had paid for it.** And so where the 
subject-matter of the contract is a right or titl,e which, unknown 
to the parties, does not exist,** There are some cases seemingly 
at variance with this rule, but they are cases in which the con- 
tract was absolute, and not impliedly conditional upon the exist- 
ence of the subject-matter.** 

«T COUTURIER ▼. HASTIE, 5 H. L. Cas. 673, Throckmorton Cfta. Con- 
tracts, 178. See, also, AUen ▼. Hammond, 11 Pet 63, 9 L. Ed. 633; Gibson 
y. Pelkie, 87 Mich. 380; Thompson y. Gould, 20 Pick. (Mass.) 184; Eetchom y. 
Catlin, 21 Vt 191; King y. DooUttle, 1 Head (Tenn.) 77; Scioto Fire Brick 
Go. y. Pond, 88 Ohio St 65; Anderson y. Armstead, 69 IlL 452; Fritzler 
y. Robinson, 70 Iowa, 600, 31 N. W. 61 ; Riegel y. Insurance Co., 153 Pa. 134, 
25 AU. 1070, 19 L. R. A. 166 ; Bluestone Coal Co. v. BeU, 38 W. Va. 2\)7, IS 
S. E. 493; Thwlng y. Lumber Co., 40 Minn. 184, 41 N. W. 815; United States 
y. Charles, 74 Fed. 142, 20 C. C. A. 346; Nordyke & Marmon Co. v. Kehlor, 
155 Mo. G43, 56 S. W. 287, 78 Am. St Rep. 600. See ''fifaZea," Deo. Dig. (Key- 
No.) f S6; Cent. Dig. If SS, Sk. 

t% Strickland y. Turner, 7 Exch. 208. And see Cochran y. WilUs, L. R. 1 Ch. 
App. 58. Bee ** Sales,** Deo. Dig. (Key-No.) i S6; Cent Dig. {{ 63, 64. 

s* Bingham y. Bingham, 1 Ves. Sr. 126; Cooper y. Phibbs, L. R. 2 H. L. 170; 
Varnum y. Town of Hjgate, 65 Vt 416,. 26 AtL 628; Hamilton y. Park & 
McKay Co., 125 Mich. 72, 83 N. W. 1018 ; Blaney y, Rogers, 174 Mass. 277, 54 
N. E. 5C1; post, p. 256. See '* Contracts,** Deo, Dig. (Key-No.) I 98; Cent. Dig. 
H 416-U9. 

so Barr y. Gibson, 8 Mees. ft W. 390 ; Hills v. Sughnie, 15 Mees. & W. 253. 
"The parties to an agreement must be acquainted with the extent of their 
rights and the nature of the information they can call for respecting them, 
else they will not be bound. The reason is that they proceed under an idea 
that the fact which is the Inducement to the conti-act is in a particalar way, 
and give their assent, not absolutely, but on conditions that are falsified by 
the eyent But where the parties treat upon the basis that the fact which 
is the subject of the agreement is doubtful, and the consequent risk each is 
to encounter is taken into consideration in the stipulations assented to, the 



S§ 130-131) MiSTAKi 263 

Same — Mistake as to Identity of Subject-Matter 

An agreement may be void where there is a mistake as to the 
identity of the subject-matter; as, for instance, wher^ the contract 
is in reference to a thing of a- certain name, and one of the parties 
thinks he is contracting for one thing that answers the description, 
while the other party thinks it is something else which also an- 
swers the description. Thus, where a person agreed to buy a car- 
go "to arrive ex Peerless from Bombay," and there were two ships 
of that name, and the buyer meant one, and the seller the other, it 
was held that there was no contract.'^ 

The things meant by the parties must have fitted the description, 
or there is no mistake. If, in the case above mentioned, the buyer 
had meant a ship of a different name, he would have been bound by 
the terms of his contract. Unless the description admits of more 
meanings than one, the party setting up mistake can only do so by 
showing that he meant something different from what he said, and, 
as we have seen, he cannot do this. Nor will a mere misnomer of 
the subject-matter of a contract entitle either party to avoid it if 
the contract itself contains such a description of its subject-matter 
as practically identifies it.** 

Same — Mistake as to Nature and Essential Qualities of Subject-Matter 
'If the parties are agreed as to the terms and subject-matter of the 
contract, it is complete by mutual assent, notwithstanding that the 
parties may be totally mistaken in the motives which induced the 
assent. The fact that the subject-matter of the contract possessed, 
or failed to possess, qualities which the parties both believed, or 
did not believe, it to possess, is immaterial.** The parties may, in- 

contract will be ralld, notwithstanding any mistake of one of Uie parties, 
provided there be no concealipent or unfair dealing by the opposite party 
that would affect any other contract" Perkins y. Gay, 3 Serg. & R. (Pa.) 
327, 8 Am. Dec. 653. Bee ^'Contracts," Dec, Dig, (Key-No,) | 93; Cent. Dig. |i 

•1 Raffles y. WlCbolbaus, 2 HurL & C. Q06. And see Gardner ▼. Lane, 9 
Allen (Mass.) 402, 85 Am. Dec. 779; Kyle v. Kayanagh, 103 Mass. 356, 4 Am. 
Rep. 560; Thornton v. Kempster, 5 Taunt 786; Cutts ▼. Guild, 57 N. Y. 229; 
Sheldon v. Capron, 8 R. I. 171 ; Haryey y. Harris, 112 Mass. 32. Where on 
, a sale of land one party thinks he Is buying one tract, and the other party 
thinks he \a selling a different tract, there Is no contract Kyle y. Kayanagh, 
supra ; Stong v. Lane, 66 Minn. 94, 68 N. W. 765. And see IRWIN y. Wll-r 
SOX, 45 Ohio St 426, 15 N. E. 209, Throckmorton Cas. Contracts, 176. See 
**Sale8;' Dec, Dig, {Key-No,) i 36; Cent. Dig, i| 63, 64^ 

•2 lonldes y. Pacific Ins. Co.. L. R. 6 Q. B. 686 ; Hazard t. Insurance Co., 
1 Sumn. 218, Fed. Caa. No. 0,282. See *' Contracts,** Deo, Dig, (Key-No.) | 93; 
Cent, Dig. |{ //io-VS. 

IS WOOD y. BOYNTON, 64 Wis. 2C5, 25 N. W, 42, 54 Am. Rep. 610, Throck- 
morton Cas. Contracts, 180 ; Hecht y. Batcheller, 147 Mass. 335, 17 N. E. 651, 



254 RBALITT OF CONSENT (Cfa. 7 

deed, make the existence of some quality a condition of the' con- 
tract, as if they should contract for the sale of "this uncut dia- 
mond/' in which case, if the contract should be construed as mak- 
ing it a condition that the uncut stone in question should be a 
diamond and in fact the stone was not a diamond, there would be • 
no contract, because the subject-matter of the contract was not in 
existence.*^ On the other hand, if the subject of sale was an un- 
cut stone, as a matter of fact believed by both parties to be a dia- 
mond, but there was nothing in the terms of the contract to make 
it a condition that the stone should be a diamond, their mutual 
mistake as to the nature of the stone would not affect the validity 
of the contract.** Thus, where a woman sold an uncut stone to a 
jeweler for $1, both being ignorant of the nature of the stone, and 
it turned out to be a diamond worth $1,000, it was held that the con- 
tract was binding.** So where the subjecjt of sale was a note, the 
maker of which the parties mutually supposed to be solvent.*' It 
is difficult to reconcile with the current of authority the case of 
Sherwood v. Walker, where the subject of sale was a blooded cow, 

9 Am. St Rep. 708; Taylor t. Fleet, 4 Barb. (N. Y.) 96; Taylor ▼. Ford, 131 
CaL 440, 63 Pac. 770 ; SteiBrart v. Tlconlc Nat Bank, 104 Me. 678, 72 Atl. 741. 
A settlement with a railway ^mpany for Injuries is binding, although the 
parties were ignorant of the extent of the injuries. Rideal v. Railway Go., 
1 Fost & F. 706; Seeley y. Traction Co., 179 Pa. 334, 36 Atl. 229; Kowalke 
y. Light Co., 103 Wis. 472, 79 N. W. 762, 74 Am. St Rep. 877 ; Houston & T. 
C. R. Co. V. McCarty, 94 Tex. 298, 60 S. W. 429, 63 L. R. A. 607, 86 Am. 
St Rep. 854. See '^Contracts;* Deo. Dig, {Key-No.) | 93; Cent Dig, Sf ilS-ilB. 

t4 <*But sometimes, even when the thing which \a the subject-matter of an 
agreement is specifically ascertained, the agreement may be avoided by ma- 
terial error as to some attribute of the thing, for some attribute which the 
thing in truth has not may be a material part of the description by which 
the thing was contracted for. If this is so, the thing as it really is, namely, 
without that quality, is not that to which the common Intention of the par- 
ties was directed, and the agreement is yoid. An error of this kind will no*" 
suffice to make the transaction yoid, unless (1) it is such that, according to 
the ordinary course of dealing and use of language, the difTerence made by 
the absence of the quality wrongly supposed to exist amounts to a difference 
in kind; (2) and the error is also common to both parties." Pol. Cont (3d 
Ed.) 450. See, on this point. Brant Cont 104-108; Miles y. Stevens, 3 Pa. 
21, 45 Am. Dec. 621; IRWIN v. WILSON, 45 Ohio St 426, 15 N. B. 209, • 
Throckmorton Cas. Contracts, 176; Watson v. Brown, 113 Iowa, 308, 85 N. W. 
28. See ''Contracts,** Dec. Dig, (Key-No.) { 93; Cent. Dig. $| J^15'ki9. 

•5 Hood y. Todd, 139 Ky. 426, 58 S. W. 783. See ''Vendor and Purchaser,*' 
Deo. Dig. {Key-No.) | 31; Cent. Dig. S| 35-37. . 

•« WOOD y. BOYNTON, 64 Wis. 265, 25 N. W. 42, 54 Am. Rep. 610, Throck- 
morton, Cas. Contracts, 180. See "fifaZe*," Deo. Dig, (Key-No.) S| 19, 36; 
Cent. Dig. If 32, 63, 6k. 

»T Hecht V. Batcheller, 147 Mass. 335, 17 N. E. 651, 9 Am. St Rep. 70a 
See ''Bales,** Dec. Dig. (Key-No.) | 36; Cent. Dig. || 63, 64. 



8§ 130-131) MISTAKB 255 

believed by the parties to be barren, and hence worth oniy $80, 
which was the price, but actually capable of breeding, and hence 
worth not less than $750, and it was held that the seller could re^ 
scind on the ground that the mistake went to the substance of the 
agreement.** 

Same — Mistake as to Quantity of Subject-Matter 

Quantity as well as quality ms^y be a condition of the contract, 
and in such case, if the designated quantity does not exist, there 
is no contract because of the nonexistence of the subject-matter. 
Where, for example, the contract is for the sale of a described tract, 
which is also described as containing a certain number of acres, it 
has been held that a material difference in the quantity is ground 
for rescission.** 

Mistake as to Price 

A mistake by one party in the statement of the price, which mis- 
take is not known to the other, does not affect the validity of the 
contract formed by the acceptance of the offer as made.** 

Of course, if the acceptance varies from the terms of the offer, 
there is no contract * Thus, where, by mistake of a teleg^ph clerk, 
an offer is wrongly transmitted, and is accepted as altered, it has 
been held that the offeror is not bound.** So if the price is stated 
in such terms that the offeree understands it as for one quantity, 

tt Sherwood ▼. Walker, 66 Mich. 568, 88 N. W. 919, 11 Am. St Rep. 531. 
Bee '* Sales," Dec. Dig. (Key-No.) | SB; Cent, Dig, || 6S, 64. 

•• Newton t. ToUes, 66 N. H. 136, 19 AU. 1092, 9 L. R. A. 60, 49 Am. St 
Rep. 593. As to mistake as to quantity of land, and relief in equity, see 
Paine v. Upton, 87 N. T. 827, 41 Am. Rep. 371; Miller v. Craig, 83 Ky. 023, 4 
Am. St Rep. 179; Pratt v. Bowman, 37 W. Va. 715, 17 S. B. 210; Hill ▼. 
Buckley, 17 Ves. 394; Rogers v. Pattie, 96 Va. 498, 31 S. B. 897; Bingham 
T. Madison, 103 Tenn. 358, 52 S. W. 1074, 47 U IL A. 267. See "Vendor and 
Purchaser;* Deo. Dig. (Key-No.) If SI, 108; Cent. Dig. If 35-57. 

40 Steinmeyer- T. Schroeppel, 226 IlL 9, 80 N. B. 664, 10 U R. A. (N. S.) 
114, 117 Am. St Rep. 224 ; Brown ▼. Leyy, 29 Tex. Civ. App. 389, 69 S. W. 255 ; 
Tatum y. Coast Lumber Co., 16 Idaho, 471, 101 Pac. 967, 23 I* B. A. (N. S.) 
1109. See **Salesr Dec. Dig. (Key-No.) f S6; Cent. Dig. IS 63, 64. 

41 Henkel v. Pape, L. R. 6 Exch. 7; Pegram y. Telegraph Co., 100 N. C. 28, 
6 S. B. 770, 6 Am. St Rep. 557 ; Pepper y. Telegraph Co., 87 Tenn. 554, 11 S. 
W. 783, 4 Ia R. A. 600, 10 Am. St Rep. 699. Some courts, however, hold the 
contrary, on the ground that the telegraph company; being selected by the 
proposer, is his agent, and that he and not the other party should suffer loss 
from the error. His remedy is against the telegraph company if it was 
negligent See Western Union TeL Co. v. Shotter, 71 Ga. 760; Ayer v. Tele- 
graph Co., 79 Me. 403, 10 Atl. 495, 1 Am. St Rep. 353. And see Durkee v. 
Railroad Co., 29 Vt 127; Anheuser-Busch Brewing Ass'n v. Hutmacher, 127 
IlL 652, 21 N. B. 626, 4 L. R. A. 575 ; Howley v. Whipple, 48 N. H. 487 ; Save- 
land T. Green, 40 Wis. 431 ; Barons ▼. Brown, 25 Kan. 410. See **Contracts,** 
Dee. Dig. (Key-No.) % 9S; Cent. Dig. U 41&-^9. 



256 >^^*^ REALITY OF CONSENT (Ch. T 

while the offeror means it in another, the parties are never ad 
idem.** The effect of such mistake is merely to show that there 
was no contract, because of the failure of the minds of the parties 
to meet 

Mistake of Law 
^ As a rule, ignorance or mistake of law, by reason of which the 
n parties do not understand the legal effect of their contract, does not 

t^' ^ avoid it, unless there is some fraud, or unless there is a relation of 
, iV confidence between the parties.** ^ 

) - In cases where the nonexistence of a right is concerned, it has 

been said that the mistake is not a mistake of law, so as to render 
the avoidance of a contract on that ground a violation of the rule 
that ignorance of law is no excuse. "It is said, 'Igriorantia juris 
baud excusat;' but in that maxim the word 'jus' is used in the 
sense of denoting general law — ^the ordinary law of the country. 
But, when the word 'jus' is used as denoting a private right, that 
maxim has no application. Private right of ownership is a matter 
of fact ; it may be the result also of a matter of law ; but, if parties 
contract under a mutual mistake and misapprehension as .to their 
relative and respective rights, the result is that that agreement is 
liable to be set aside as having proceeded upon a common mis- 
take." ** Under this rule, the sale of a thing which, unknown to 



C" 



«s Greene ▼. Bateman, 2 Woodb. & M. 350. See, also, Rupley ▼. Daggett, 74 
111. 351; Rovegno y. Defferarl, 40 Gal. 459; Peerless Glass Co. v. Tinware 
Co., 121 Cal. 041, 54 Pac. 101. Bee **8alei;' Dec. Dig. {Key-No.) | 86; Cent. 
Dig. SI 63, €4. 

4sBirkhauser ▼. Schmitt, 45 Wia. 816, 80 Am. Rep. 740; Fish v. Gleland, 
83 111. 243 ; Hunt ▼. Rhodes, 1 Pet 1, 7 U Ed. 27 ; Storrs v. Barker, 6 Johns. 
Ch. 166» 10 Am. Dea 816; Starr t. Bennett, 5 Hill (N. T.) 303 ; Bank of United 
States ▼. Daniel, 12 Pet 32, 9 L. Ed. 980 ; MelUsh ▼. Robertson, 25 V t 603 ; 
Good ▼. Herr, 7 Watts & S. (Pa.) 253, 43 Am. Dec. 236*^ Rice ▼. Manufactur- 
ing Co., 2 Gush. (Mass.) 80; Dodge ▼. Insurance Co., 12 CTray (Mass.) 65; 
Hubbard ▼. Martin, 8 Yerg. (Tenn.) 498; Townsend v. Cowles, 81 Ala. 428; 
Christy v. SuUiyan, 50 Cal. 837; Wheaton v. Wheaton, 9 Conn. 96; Goltra v. 
r-^ Sanasack,"53 111. 458; Upton v. Tribilcock, 91 U. S. 45, 23 L. Ed. 208; Porter 
^ -^ V. Jefferies, 40 S. C. 92, 18 S. E. 229 ; Osburn v. Throckmorton, 90 Va. 311, 18 
S. E. 285 ; Pittsburgh & L. R. Iron Co. T. Iron Co., 118 Mich. 109, 76 N. W. 
395; post, pp. 226, 542. But see Lowndes y. Chisholm, 2 McCord, Eq. (S. C.) 
455, 16 Am. Dec 667.' In North Dakota a mistake of law common to both 
parties renders the contract void by statute. Sllander y. Gronna, 15 N. D. 
552, 108 N. W. 544, 125 Am. St Rep. 616. See ** Contracts,** Dec. Dig. {Key- 
No.) S 9S; Cent. Dig. i| 415-419. 

** Cooper ▼. Phlbbs, L. R. 2 H. L. 170, per Lord Westbury. And see Wilson 
y. Insurance Co., 60 Md. 157; Toland y. Corey, 6 Utah, 392, 24 Pac. 190; 
Lovell y. Wall, 81 Fla. 73, 12 South. 659; Motherway y. Wall, 168 Mass. 3.33. 
47 N. B. 135 ; Morgan y. Bell, 3 Wash. 554, 28 Pac. 925, 16 L. R. A. 614. "In 
the often quoted passage * * * he [Lord Westbury] only meant that cer- 



§§ 13^134) MISTAKE 267 

the parties, already belongs to the buyer, or does not belong to the 
seller, is void/' This is not a mistake of law, but of fact. 

Ignorance of foreign laws, including the laws of a sister state, is 
regarded as ignorance of fact, and not of law, since a person is not 
bound to acquaint himself with them/* 

A mistake in drawing up a contract, or a mistake in the legal ef- 
fect of a description in a deed or Other writing, or in the use of 
technical language, may be ground for relief in equity/^ 



SAME— EFFECT— REMEDIES 

132. EFFECT. Mistake, where it has any effect, i^enders a con- 

tract void. 

133. REMEDIES AT LAW. At conunon law the contract may 

be repudiated if it is executory, or, if executed in whole or 
in part, what has been paid or delivered under it may be 
recovered back. 

134. REMEDIES IN EQUITY. In equity a suit for specific per- 

formance may be resisted; or suit may be brought to de- 
clare the contract void; or, if the mistake is merely in 
drawing up the contract, suit may be brought to reform 
the instrument. 

As we shall presently see, fraud renders a contract voidable 
only. The effect of mistake, however, where it has any operation 

tain words, such as 'ownership/ 'marriage/ 'settlement,' etc., import both a 
conclnsion of law and facts Justifying it, so that, when asserted without ex- 
planation of what the facts reUed on are, they assert the existence of facts 
sufficient to Justify the conclusion, and a mistake induced by such an assertion 
la a misUke of fact" Alton ▼. Bank, 157 Mass. 841, 32 N. E. 228, 18 L. R. 
A. 144, 34 Am. St. Rep. 285, per Holmes, J. See **0antract9," Dec. Dig. (Key- 
No.) I 9S; Cent. Dig, |{ ^5-^19. 

, «« 2 BL Comm. 450; Trigg \. Read, 5 Humph. (Tenn.) 629, 42 Am. Dec 447; 
Bingham t. Bingham, 1 Yes. Sr..l26; Martin ▼. McCk>rmick, 8 N. T. 331; 
Cutts ▼. Guild, 57 N. T. 229. Contra, Birkhauser ▼. S<dmiitt, 45 Wis. 316, 30 
Am. Rep. 740. Ante, p. 252. Bee *'OontractB,'' Dec. Dig. (Key-No.) f 93; 
cent. Dig. II JklS'-ItW. 

4« Haven ▼. Foster, 9 Pick. (Mass.) 112^ 19 Am. Dec. 853 ; Vinal y. Im- 
provement Ck>., 53 Hun, 247, 6 N. Y. Supp. 595; Bank of Chilllcothe y. Dodge, 
8 Barb. (N. T.) 233; Wood v. Boeder, 50 Neb. 476, 70 N. W. 27; Rosenbaum 
y. Credit System Co., 64 N. J. Law, 34, 44 AtL 966. Bee "CotUracts,** Dec. 
Dig. (Key-No.) | 9S; Cent. Dig. U 4^5-419. 

«T Canedy y. Marcy, 13 Gray (Mass.) 373; Snell y. Insurance Co., 98 U. S. 
85, 25 L. Ed. 52 ; QHswold y. Hazard, 141 U. S. 260, 11 Sup. Ct 972, 999, 35 
L. Ed. 678 ; Benson y. Markoe, 37 Minn. SO, 33 N. W. 88, 5 Adl St Rep. 816 ; 
Kyner y. Boll, 1S2 III. 171, 54 N. E. 925 ; Piukham y. Pinkham, 60 Neb. 600, 

Claek Co?it.(3d Ed.) — ^17 < 



258 REALITY OF CONSENT (Ch. 7 

at all, is to render the contract void.** The common law, there- 
fore, offers two remedies to a person who has entered into an agree- 
ment which is void on the ground of mistake. If it be still execu- 
tory, he may repudiate it, and successfully defend an action brought 
upon it. If he has paid money under it, he may recover it back 
upon the general principle that "where money is paid to another 
under the influence of a mistake — ^that is, upon the supposition 
that a specific fact is true, which would entitle the other to the mon- 
ey, but which fact is untrue — ^an action will lie to recover it 
back." *• 

In equity the victim of the mistake may resist specific perform- 
ance of the contract, and may sometimes do so successfully when 
he might not be able to successfully liefend an action at law for 
damages arising from its breach.'^ He may also sue to have the 
contract declared void, and to be freed from his liabilities in respect 
of it. If the mistake was in drawing up the contract, a suit in eq- 
uity may be brought to correct the mistake, and reform the instru- 
ment so it will express the real intention of the parties.** 

A party who is entitled to avoid a contract on the ground of mis- 
take must rescind at law, or seek his relief in equity, within a rea- 
sonable time after knowledge of the mistake.** 

83 N. W. 837. Bee *'Contract»;' Dee. Dig, (Key-Vo.) f 95; Cmt, Dig, || ^15- 
kl9. 

4» FOSTER V. MACKINKON, L. R. 4 C. P. 704, 38 L. J. O. P. N. S. 310, 
20 L. T. N. S. 887, 17 Wkly. Rep. 1105, Throckmorton Cas. Contracts, 166; 
CUNDT v. LINDSAY. 3 App. Cas. 459, 47 U J. Q. B. 481, 38 L. T. Rep. N. 
S. 573, 26 Wkly. Rep. 406, Throckmorton Cas. Contracts, 169. Bee ^Con- 
tracts,** Dec. Dig, (Key-No,) | 94; Cent. Dig. H 420-4S0. 

*«Keny V. Solarl, 9 Mees. & W. 54; Wheadon ▼. Olds, 20 Wend. (N. T.) 
174; post, pp. 630, 637. Bee ** Payment** Dec. Dig. {Key-No.) | 85; Cent. Dig, 

11 272-281. 

••Webster t. Cecil, 30 Beav. 62; Frlsby y. BaUance, 4 Scam, (in.) 287, 39 
Am. Dec. 409; Trigg y. Read, 5 Humph. (Tenn.) 529, 42 Am. Dec. 447. Bee 
''Contracts;* Dec. Dig. {Key-No,) % 259; Cent, Dig. Sf 1156-1159; ""Bpeciftc 
Performance;* Deo. Dig. (Key-No.) f 52; Cent. Dig. {f 155-159. 

81 ElUott ▼. Sackett, 108 U. S. 132, 2 Sup. Ct 375, 27 U Ed. 678 ; Beardsley 
Y, Knight, 10 Vt 185, 83 Am. Dec. 193; Newcomer y. Kline, 11 GiU & J; (Md.) 
457, 37 Am. Dec. 74 ; Kilmer y. Smith, 77 N. Y. 226, 33 Am. Rep. 613 ; Jenks 
V. Fritz, 7 Watts & S. (Pa.) 201, 42 Am. Dec 227; Fowler v. Woodward, 26 
Minn. 347, 4 N. W. 231 ; Paine v. Upton, 87 N. T. 327, 41 Am. Rep. 371. Bee 
"Reformation of Instruments,'* Dec. Dig. (Key-No.) | 17; Cent. Dig. §| 69-71. 

s2 Grymes y. Sanders, 93 U. S. 55, 23 Ll Ed. 798 ; Thomas y. Bartow, 48 N. 
Y. 193; Sable y. Maloney, 48 Wis. 331, 4 N. W. 479; Dodge v. Insurance Co., 

12 Gray (Mass.) 71 ; Diman y. Railroad Co., 5 R, I. 130. Bee '^Reformation 
of Instruments,** Dec. Dig. (Key-No.) i S2; Cent. Dig. S| 119-121. 



(D^d 



§§ 135-138) MISRBP&ESBNTATIOir 269 



MISREPRESENTATION 

[^5. Misrepresentation is an innocent misstatement or nondisclo- 
sure of facts. It must be distinguished from 

(a) Fraud, which is a false representation (or nondisclosure un- 
der such circumstances that it amounts to a misrepresen- 
tation) known to be false, or made in reckless ignorance 
as to its truth or falsity. 

(b) Conditions and warranties, which are representations con- 
stituting terms of the contract. 



SAME— EFFECT 

136. Mere misrepresentation has at law no effect on a, contract, ex- 

cept in the case of contracts said to be uberrima^ fidei, in 
which, from their nature, or from the particular circum- 
stances, one party must rely on the other JEor his knowl- 
V edge of the facts, and the other is boimd to the utmost good 
faith. These are : 

(a) Contracts of marine, fire, and life insurance. 

(b) Contracts between persons occupying a confidential relation, 

as between attorney and client, principal and agent, guard- 
ian and ward, trustee and cestui que trust, etc. 

(c) To a limited extent, contracts for the sale of land. 

(d) In England, and probably with us, contracts with promoters 

of a corporation for the purchase of shares. 

137. Where misrepresentation has any effect at all, it renders the 

contract voidable. 

138. A material misrepresentation is ground for granting or refus- 

ing equitable relief. 

Whai Amounts to a Representation 

A representation is an affirmation by word^ or conduct of a mat- 
ter of fact by way of inducement to the making of a contract. In 
speaking of representations in entering into contracts of insurance, 
Mr. Justice Story said: "To • constitute a representation, there 
should be an explicit affirmation or denial of a fact — of such an al- 
legation as would irresistibly lead the mind to the same conclusion. 
If the expressions are ambiguous, or such as the parties might fair- 
ly use without intending to authorize a particular conclusion, the 



of^ 






260 REALITX OF C0N8BNT (Ch. 7 

assured ought not to be bound by the conjectures, or calculations 
of probability, of the underwriter/* •• 

. A mere statement or expression of opinion or statement of in- 
tention will not amount to a representation, the falsity of which 
will avoid a contract.** Thus, in a contract of marine insurance, 
the assured communicated to the insurer a letter from the master 
of his vessel, stating that, in his opinion, the anchorage of the place 
to which the vessel was bound was safe. The vessel was lost there, 
but the court held that the assured, in reading the master's letter 
to the insurers, communicated to them all that he himself knew of 
the voyage, and that the expressions contained in the letter were 
not a representation of fact, but an opinion which the insurers 
could act upon or not, as they pleased.** Nor are com mendatory 
expr essions, such as men habi tually use in order to inH uce others 
t o enter into a bargain, regarded as representat io ns of fac t.** The 
misrepresentation, to be eflFective at all in avoidance oi the contract, 
must have been relied upon by the other party, and have induced 
him to enter into the contract, or, rather, it must have been one of 
the inducements.*^ This will be more fully considered in treating 
of fraud.** 

Misrepresentation Distinguished from Fraud 

"Misrepresentation," as the term is here used, must be distin- 
guished from "fraud," with which we are to deal presently. Mis- 
representation means an innocent misstatement or nondisclosure of 

•s LlYlngston ▼. Maryland Ins. Go., 7 Cranch, 606, 541, 8 L. Ed. 421. Be^ 
"Insurance,** Deo, Dig, (Key-No,) U 253-256; Cent, Dig. H 5S8^i9. 

»4 Dowdall y. Ganndy, 32 111. App. 207 ; Bryant v. Ocean Ins. Co., 22 Pick. 
(Mass.) 200; Rice ▼. Insurance Co., 4 Pick. (Mass.) 439; Allegro's Adm'rs ▼. 
Insurance Ck)., 2 Gm & J. (Md.) 136, 20 Am. Dec. 424; Fosdlck ▼. Insurance 
Co., 8 Day (Conn.) 108; Dennison ▼. Insurance Ck>., 20 Me. 125, 37 Am. Dea 
42 ; Connecticut Mut Life Ins. Co. y. Luehs, 108 U. S. 498, 2 Sup; Ct 049, 27 
L. Ed. 800. See ^'Contracts," Deo. Dig, {Key-No.) % 94; Cent. Dig. |f 420-430, 

SB Anderson v. Insurance Co., L. R. 7 C P. 65. See ''Insurance,*' Deo. Dig, 
(Key-No,) | 272; Cent, Dig. ff 572-582, 

s« A statement by an auctioneer that land which he offered for sale was 
"very fertile and improvable," whereas, in fact, it was in part abandoned as 
useless, was held to be "a mere flourishing description by an auctioneer,*' and 
not such a representation as would avoid the sale. Dimmock t. Hallett, L. 
R. 2 Ch. 21, 27. But on the sale of an hotel it was held that the contract was 
avoided by a false statement that the present lessee was "a most desirable 
tenant" Smith ▼. Property Co., 28 Ch. 'Div. 7. And see Tuck ▼. Downing, 
76 111. 71. See, also, post, p. 282. See ''Contracts,'* Dec, Dig. (Key-No.) | 94; 
Cent, Dig. || 520-530. 

»7 Tuck V. Downing, 76 111. 71 ; Fauntleroy v. Wilcox, 80 111. 477; Slaughter 
V. Gerson, 13 Wall. 379, 20 L. Ed. 627 ; post, p. 289. See ''Contracts^" Dec Dig. 
(Key-No,) f 94; Cent, Dig, K 4^0-430. 

»• See post, pp. 282, 2S9. 



§§ 13&-138) MISBEPBESENTATION 2^1 

f 

facts, while fraud consists in representations whicli are known to be 
false, ot which are made in reckless ignorance of their truth or falsi- 
ty, or in nondisclosure or concealment of facts under such circum- 
stances that it amounts to a representation that the facts concealed 
do not exist. This will be more fully explained in treating of fraud. 
The practical test of fraud, as opposed to mere misrepresentation, 
is that fraud gives rise to an action ex delicto, while innocent mis- 
representation does not. Fraud, b esides, b eing a vitiating ej^tofipt 
i n contract, is a to yt njr wrony apar t from contrac t, and V^'^y V 
treated as such bv bringing an action of deceit . Misrepresentation, 
in exceptional cases, may invalidate a contract, but will not sup- 
port an action of deceit 

Misrepresentation Distinguished from Conditions and Warranties 

It may be stated as a rule, subject to exception in case of certain 
contracts to be hereafter noticed, that innocent misrepresentation or 
nondisclosure of fact does not affect the validity of consent. The 
tendency of the courts has been to bring, if possible, every state- 
ment which is important enough to affect consent into the terms 
of the contract, and a representation which cannot be shown to have 
had so material a part in determining consent as to have formed, 
if not the basis of the contract, at least an integral part of its terms, 
is set aside altogether. If it is a part of the contract, it is no longer 
called a mere misrepresentation ; it is a condition or warranty, and 
its falsity does not affect the formation of the contract, but operates 
to discharge the injured party from his obligation, or gives him a 
right of action based on the contract for loss sustained by reason of 
the untruth of the statement. The statement in such case is a 
term of the contract. 

The distinctions are well shown in a leading English case. The 
action was brought on a charter party in which it was agreed that 
the plaintiff's ship, *'then i n the port of Amsterdam .'* should proceed 
to a certain port and load a. cargo. At the date of the contract the 
ship was not in the port of Amsterdam, and did not arrive there 
for several days. The defendant refused to carry out the agree- 
me nt. and repud iated it. Th e co urt held that the statement that the 
sKTp^ was in the port of Amsterdam was intended by the parties to 
be a conditipn^ and a breac h thereof disc h arg ed the^charterer.** 

•• Behn ▼. Bumess, 8 Best & S. 75L And see Davison y. Von Lingen, 118 
U. S. 40, 6 Sup. Ct 346, 23 L. Ed. 885; Lowber v. Bangs, 2 WaU. 728, 17 L. 
Ed. 768; NORRINGTON v. WRIGHT, 115 U. S. 188, 6 Sup. Ct. 12, 29 L. Ed. 
866, Throckmorton Cas. Ck)ntracts, 386. As to the distinction in contracts of 
insurance, see Hartford Protection Ina. Co. t. Harmer, 2 Ohio St 452, 59 Am. 
Dec. 684 ; Schwarzbacb y. Protective Union, 25 W. Va. 655, 52 Am. Rep. 227 ; 
6L0BB MUT. LIFE INS. ASS'N v. WAGNER, 188 111. 138, 58 N. H. 970, 52 






/ '/ -^ ' 



262 RBALITT OF CONSENT (Ch. 7 

Williams, J., in giving judgment, thus distinguishes the various 
parts or terms of a contract : "Properly speaking, a representation 
is a statement or assertion, made by one party- to the other, before 
or at the time of the contract, of some matter or circumstance re- 
lating to it Though it is sometimes contained in the written in- 
strument, it is not an integral part of the contract, and consequently 
the contract is not broken, though the representation proves to be 
untrue ; nor (with the exception of the case of policies of insurance 
— at all events, marine policies, which stand on a peculiar anoma- 
lous footing) is such untruth any cause of action, nor has it any 
efficacy whatever, unless the representation was made fraudulently, 
either by reason of its being made with a knowledge of its untruth, 
or by reason of its being made dishonestly, with a reckless igno- 
rance whether it was true or untrue. * * * Though representa- 
tions are not usually contained in the written instrument of con- 
tract, yet they sometimes are. But it is plain that their insertion 
therein cannot alter their nature. A question, however, may arise 
whether a descriptive statement in the written instrument is a mere 
representation, or whether it is a substantive part of the contract. 
This is a question of construction which the court, and not the jury, 
must determine. If the court should come to the conclusion that 
such a statement by one party was intended to be a substantive part 
of his contract, and not a mere representation, the often-discussed 
question may, of course, be raised, whether this part of the contract 
is a condition precedent, or only an independent agreement, a breach 
of which will not justify a repudiation of the contract, but will only 
be a cause of action for a compensation in damages. In the con- 
struction of charter parties, this question has often been raisied with 
reference to stipulations that some future thing shall be done or 
shall happen, and has given rise to many nice distinctions. Thus, 
a statement that a vessel is to sail, or be ready to receive a cargo, 
on or before a given day, has been held to be a condition,** while 
a stipulation that she ^hall sail with all convenient speed, or with- 
in a reasonable time, has been held to be only an agreement.** But 
with respect to statements in a contract descriptive of the subject- 
matter of it, or of some material incident'thereof, the true doctrine, 

L. R. A. 649, 80 Am. St Rep. 1G9, Throckmorton Cas. Contracts, 184. Bee "In- 
surance," Deo. Dig. {Key-No.) §§ 2S9-^56; Cent. Dig. S| 538^49. 

«o Glaholm y. Hays, 2 Man. & G. 257. See "Oontraota," Deo. Dig. (Key-No.) 
f 94; Cent. Dig. U 4^0-480; "Insurance," Dec. Dig. (Key-No.) | 265; Cent. 
Dig. f 560. 

•1 Seeger ▼. Duthle, 8 G. B. (N. S.) 45 ; Tarrabochla ▼. Hlckie, 1 Hurl. & 
N. 183. See "Contracts," Deo. Dig. (Key-No.) f 94; Cent. Dig. U 4^0-480; 
^'Insurance," Dec Dig. (Key-No.) | 265; Cent. Dig. | 560. 



§§ 135-138) KISEKPBBSENTATION ^ [f^^^^ ^^ J 

established bj principle as well as authority, appears to be, general- 
ly speaking, that, if such descriptive statement was intended to be 
a substantive part of the contract, it is to be regarded as a warran- 
ty ; that is to say, a condition on the failure or nonperformance 
of which the other party may, if he is so minded, repudiate the con- 
tract in toto, and so be relieved from performing his part of it, pro- 
vided it has not been partially executed in his favor. If, indeed, he 
has received the wliole or any substantial part of the consideration 
for the promise on his part, the warranty loses the character of a 
condition, or, to speak perhaps more properly, ceases to be available 
as a condition, and becomes a warranty in the narrower sense of the 
word, viz. a stipulation by way of agreement, for the breach of 
which a compensation must be sought in damages." 

Same — Various Senses of the Terms and Their Effect 

It will be observed •* that in the opinion above quoted "condition" 
is used in two senses — as meaning a statement that a thing is, and 
a promise that a thing shall be. In either case the statement or 
promise is of so important a nature that the untruth of the one, or 
the breach of the other, discharges the contract. "Warranty" also 
is used in several senses. It is first made a convertible term with 
a condition. It is then used '*in the narrower sense of the word," 
in which sense it means (1) a subsidiary promise in the contract, 
the breach of which could under no circumstances do more than 
give rise to an action for damages, and (2) a condition, the breach 
of which might have discharged the contract had it not been so far 
acquiesced in as to lose its effect for that purpose, though it may 
give-rise to an action for damages. 

The various senses of the terms we have been discussing, and 
their effect, may be summed up as follows: (1) "Representations," 
not fraudulent, made at the time of entering into the contract, but 
not forming a part of it, may affect its validity in certain special 
cases, but. are otherwise inoperative. When they do operate, their 
falsehood vitiates the formation of the contract and makes it voida- 
ble. (2) "Conditions" are either statenients or promises which 
form the basis of the contract. Whether or not a term in the con- 
tract amounts to a condition must be a question of construction, to 
be answered by ascertaining the intention of the parties from the 
wording of the contract and the circumstances under which it was 
made. But when a term in the contract is ascertained to be a condi- 
tion, then, whether it be a statement or a promise, the untruth or 
the breach of it will entitle the party to whom it is made to be dis- 
charged from his liabilities under the contract (3) "Warranties," 

•s See Anson, Ck>nt (8th Ed.) 14d. 



264 KEALITY OF CONSENT (Ch. 7 

Used in '*the narrower sense/* are independent subsidiary promises, 
the breach of which does not discharge the contract, but gives to the 
injured party a right of action for such damage as he has sustained 
by the failure of the other to fulfill his promise. (4) A condition 
may be broken, and the injured party may not avail himself of his 
right to be discharged, but continue to take beneJit under the con- 
tract, or, at any rate, to act as though it were still in operation. In 
such a case the condition sinks to the level of a warranty, and the 
breach of it, being waived as a discharge, can only give a right of 
action for the damage sustained.** This is sometimes called a "war- 
ranty ex post facto." 

A strong illustration of the tendency of the courts to bring a 
statement material enough to affect consent into the terms of the 
contract is offered by an English case arising out of a sale of hops 
by the plaintiff to the defendant. It appeared that, before com- 
mencing to deal, the defendant asked the plaintiff if any sulphur 
had been used in the treatment of that year's crop. The plaintiff 
said, "No." The defendant said that he would not even ask the 
price if any sulphur had been used. After this the parties discussed 
the price, and the defendant agreed to purchase the crop of that 
year. He afterwards repudiated the contract on the ground that 
sulphur had been used, and the plaintiff sued for the price. It was 
shown that the plaintiff had used sulphur over 5. acres, the entire 
growth consisting of 300 acres. He had used it for the purpose of 
trying a new machine, had afterwards mixed the whole growth to- 
gether, and had either forgotten the matter or thought it unim- 
portant. The jury found that the representation made by the plain- 
tiff as to the use of sulphur was not willfully false, and they further 
found that "the affirmation that no sulphur had been used was in- 
tended by the parties to be a part of the contract of sale, and a war- 
ranty by the plaintiff." The court had to consider the effect of this 
finding, and came to the conclusion that the representation of the 
plaintiff was a part of the contract, and a preliminary condition, the 
breach of which entitled the defendant to be discharged from liabil- 
ity. Erie, C. J., said : "We avoid the term 'warranty' because it is 
used in two senses, and the term 'condition' because the question 
is whether that term is applicable. Then the effect is that the de- 
fendants required, and that the plaintiff gave, his undertaking that 
no sulphur had been used. This undertaking was a preliminary 
stipulation ; and, if it had not been given, the defendants would not 
have gone on with the treaty which resulted in the sale. In this 

«> Avery t. Willson, 81 N. Y. 341, 37 Am, Rep. 503 ; post, p. 584. Bee **8ale8,*' 
Deo. Dig. {Key-No.) §§ ^48-251; Cent. Dig. ${ 707-710. 



§§ 135-138) MISREPRESENTATION 265 

sense it was the condition upon which the defendants contracted, 
and it would be contrary to the intention expressed by this stipu- 
lation that the contract should remain valid if sulphur had been 
used. The intention of the parties governs in tht making and in 
the construction of all contracts. If the parties so intend, the sale 
may be absolute, with a warranty superadded ; or the sale may be 
conditional, to be null if the warranty is broken. And, upon this 
statement of facts, we think that the intention appears that the 
contract should be null if sulphur had been used; and upon tlus ^ 
ground we agree that the rule should be discharged." •* . \^^^ 
Conclusion as to Effect of Misrepresentation A^^ ^^-^^^ ' 

From what has been shown, we may st^te the rule as to misrepre- 



sentations in this way: Whenever the validity of a contract is ^^ 
called in question, or the liahilitie<^ of the pa rties j^^ sa id to be af- ^/ 




stat ements in question a part of the te rms of the contract? (2) If_ 
not, were they made fraudulently ? (3) If nei ther of the se, wa s 
the contract one of that class of contracts' called "contr acts ul ^ er- 
rimae fidei," in which one of the parties had to rely p ec uliarly on 
the other for hi; ] Irnnr'l tdff QJ lajnatcrial J acts, a nd ^:^e other w ag 
bound to the most j jcrfect gOQd f ajth ?^Jfalf of these Jiucstions^ are 
an swered in the negative, the representation has no effect at all.** 

Excepted Contracts Affected by Mere Misrepresentation 

To the general rule that misrepiresentations not amounting to 
fraud, and not forming a term of the contract, do not affect its val- 
' idity, there are exceptions in case of certain special contracts some- 
times said to be uberrimx fidei; that is, contracts of such a char 
acter that one of the parties must refy on the other foFTiTs knowl- 
edge of the fa cts. As the term implies, the most perfect good faith 
is required in such cases, and any material misstatement or conceal- 
ment of facts, even though innocent, will avoid the contract. 

Same — Contracts of Insurance 

Among these excepted contracts are contracts of insurance. In 
the case of a contract of marine insurance the assured is bound to 
give the insurer all such information as would be likely to affect 
his judgment in accepting the risk, and misrepresentation or non- 

•4 Bannerman y. White, 10 C. B. (N. S.) 8G0. See *'Sal€s,*' Deo. Dig, (Key- 
Vo.) U 248-251; Cent. Dig. U 707-710. 

•» QLOBE MUT. LIFE INS. ASS'N ▼. WAGNER, 188 HI. 133, 58 N. BL 970, 
62 L. R. A. 649, 80 Am. St Rep. 169, Throckmorton Cas. Ck>ntracts, 184. Bee 
•"Coniraeis,'' Dee. Dig. (KeyJfo.) f 9i; Cent. Dig. H 420-4S0. 



v.f 



2G6 RBAXiITT OF CONSENT (Ch. 7 

disclosure of any such matter, though perfectly innocent, will vi- 
tiate the policy.'* As said by the Ohio court: "The assured is 
bound to communicate every material fact within his knowledge not 
known, or presumed to be known, to the underwriter, whether in- 
quired for or not; and a failure in either particular, although it 
might have arisen from mistake, accident, or forgetfulness, is at- 
tended with the rigorous consequence that the policy never attach- 
es, and is void, for the reason that the risk assumed is not the one 
intended to be assumed by the parties." '^ Thus, a policy of marine 
insurance has been avoided because the goods were insured for an 
amount considerably in excess of their value, though the fact of 
overvaluation did not affect the risks of the voyage, simply because 
the valuation is a fact usually taken into consideration by under- 
writers.** 

It is said t hat thejliQctcix^ ^pP^Viahl^ \^ [parine insurance fines no t 

applvi to Jjic iuil ^^^^nti ^"^ ^^^?r r^nt^a^t^ of.iusuiance.** It is 

settled, however, that any false representation of a material fact, 
however innocently made, will avoid the policy.^* It has even been 
held, in cases where the fact undisclosed was peculiarly within the 
knowledge of the insured, and not such as to be patent on examina- 
tion, that the innocent nondisclosure of a material fact will vitiate 
the policy. Where, for instance, one fire insurance company rein- 
sured a risk in another company without informing the latter that it 
had heard that the assured, or at least some one of the same name, 
had been so unlucky as to have had several fires, in each of which he 
was heavily insured, it was held that such nondisclosure, though un- 
intentional, vitiated the contract of reinsurance.^* Where, however, 

«« McLanahan ▼. Insurance Co., 1 Pet 170, 7 L. Ed. 9S; Lewis ▼. Insurance 
Ck>., 10 Gray (Mass.) 508; Ely y. Hallett, 2 Oaines (N. Y.) 57; Stoney y. In> 
surance Ck>., Harp. (S. C.) 235; Lexington Fire, Life & Marine Ins. Ck>. ▼. 
Paver, 16 Ohio, 324 ; Vale y. Insurance Co., 1 Wash. C. C. 283, Fed. Cas. No. 
16,811; Augusta Ins. & Banking .Co. v. Abbott, 12 Md. 34& iSee ^'In^wrancer 
Deo. Dig, (K^-Vo.) {{ 256, «7«; Cent Dig, {§ 5^0, 54^, 572^82. 

«r Hartford Protection Ins. Co. v. Harmer, 2 Ohio St 452, at page 462, 58 
Am. Dec. 684. See *'Insuranoe,** Deo. Dig. {Key-No.) || 254, 256; Cent. Dig. 
§{ 548-^49. 

•s lonides ▼. Pender, L. R. 9 Q. B. 537. See ^'Insurance,'* Deo. Dig. (Key- 
No.) I 281; Cent. Dig, {{ 597-600. 

•• Hartford Protection Ins. Co. v. Harmer, 2 Ohio St, at page 463, 50 Am. 
Dec. 684. And see Burritt v. Insurance Co., 5 Hiil (N. Y.) 188, 40 Am. Dec. 
345; Wineland y. Insurance Co., 53 Md. 276; United States Fire & Marine 
Ins. Co. v. Klmberly, 34 Md. 224, 6 Am. Rep. 325. See ** Insurance,'* Dec. Dig. 
(Key-No.) § 256; Cent. Dig. §{ 5^0, 5i9. 

TO Armour y. Insurance Co., 90 N. Y. 450. See ^Inauranoe,^ Dec Dig. (Key- 
No.) I 256; Cent. Dig. §| 540, 549. 

Ti New York Bowery Fire Ins. Co. y. Insurance Ca, 17 Wend. (N, Y.) 359. 



§§ 185-138) MISBBFRESEMTATION 267 

as is now generally the practice, written applications for insurance 
are required, in which specific questions are asked and answered, an 
innocent failure to disclose facts about which no inquiry is made 
will not avoid the policy, though it is otherwise where there is an 
innocent failure to disclose a fact where inquiry is made.^* 

In England and in some of our states a distinction has been 
drawn between life insurance and marine and fire insurance, and life 
insurance has been said not to be within the exception to the rule 
that innocent misrepresentation does not avoid a contract.^* In 
most of our states, however, no dist inction is made in this r espect *^ 
between lile and tire insuranc e, mis representation of a material fact, 
whether inqorent or fraudulent^ avoiding the p olicy,^ * 

Even in England the tendency of the modern adjudications is 
towards applying the doctrine that innocent misrepresentation, in- 
cluding nondisclosure, vitiates a contract of fire or life, as well as 
marine, insurance, without any practical distinction.^* 

Same — Contracts for the Sde of Land 

It is said by Sir William Anson that contracts for the sale of 
land are uberrimse fidei, and therefore within the exception to the 

And see Walden ▼. Insurance Go., 12 La. 134, 32 Am. Dec 116 ; Gurry y. Ii> 
6uranoe Go., 10 Pick. (Mass.) 636, 20 Am. Dea 647 ; Fowler ▼. Insurance Go., 
6 Gow. (N. Y.) 673, 16 Am. Dec. 460; Bobbltt ▼. Insurance Go., 66 N. O. 70, 8 
Am. Rep. 494. Bee ''Insurance," Dec Dig. (Key-No.) ^ ^6; Cent. Dig. U ^40, 
54$. 

v> Green ▼. Insurance Go., 10 Pick. (Mass.) 402; Goul v. Insurance Go., 112 
Mass. 136, 17 Am. Rep. 72; Washington MiUs Mfg. Go. t. Insurance Go., 136 
Mass. 606; Burrltt ▼. Insurance Go., 6 Hm (N. T.) 188, 40 Am. Dec 346; 
Browning ▼. Insurance Go., 71 N. Y. 608, 27 Am. Rep. 86 ; North American Ins. 
Go. ▼. Throop, 22 Mich. 146, 7 Am. Rep. 638; CHark v. Insurance Go., 8 How. 
240, 12 L. Ed. 1061 ; Ripley ▼. Insurance Go., 30 N. Y. 136, 86 Am. Dec 862 ; 
Short Y. Insurance Go., 90 N. Y. 16, 43 Am. Rep. 13a See ** Insurance,'* Deo. 
Dig. {Key-No.) | 256; Cent. Dig. H HO, 649. 

rt Whulton Y. Hardesty, 8 El. & BL, at page 299; Schwarzbach y. Protec- 
tlYe Union, 26 W. Va. 655, 62 Am. Rep. 227. And see GLOBE MUT. LIFE 
INS. ASS'N Y. WAGNER, 188 HL 133, 68 N. E. 970, 62 L. R. A. 649, 80 Am. 
St Rep. 169, Throckmorton Gaa Contracts, 184. £fee ''Insurance,** Deo. Dig. 
(Key-No.) |f 256, 272; Cent. Dig. f§ 540, 549, 572-^82. 

Y 4 Bliss, Ins. 76; Vose y. Insurance Go., 6 Gush. (Mass.) 42; Gampbell y. 
Insurance Go., 98 Mass. 381, at page 396; Goucher y. Association (G. G.) 20 
Fed. 696 ; New York Life Ina Go. y. Fletcher, 117 U. S. 619, 6 Sup. Gt 837, 
29 L. Ed. 934 ; Mutual Ben. Life In& Ck>. y. Wise, 34 Md. 682 ; JEtna life Ins. 
Go. Y. France, 91 U. S. 612, 23 Ia Ed. 401. See Phoenix Mot Life Ins. Go. y. 
Raddin, 120 U. S. 183, 7 Sup. Gt 600, 30 L. Ed. 644 ; Gable y. Insurance Go., 
Ill Fed. 19, 49 G. G. A. 2ia Bee "Insurance,** Dec. Dig. (Key-No.) ff 256, 
272; Cent. Dig. S| 540, 549, 572^82. 

T6 London Assurance y. Mansel, 41 Law T. (N. S.) 225. See '^Insurance," 
Dec. Dig. (Key-No.) U 256, 272; Cent. Dig. %% 540, 549, 512-582. 



268 REALITY OF CONSENT (Ch: 7 

rule that Innocent misrepresentation does not affect the validity of 
the contract; but this is so only to a very limited extent, even in 
England/* and probably to a less extent in this country. As a rule, 
the courts of law with us recognize no distinction in this respect 
between contracts for the sale of land and other contracts.^' ^^ 
purchaser of land, it has been held ^ is not bound to disclose facts 
within his knowledge which render the lq,nd worth n mch ^19^^ inan" 

th^jrire he n{=fej&i as, fnr I'riQtanrP ^tl<^ f^^t th^t there ig a valua- 
ble mine under i^ .^* It has, however, been held that a misdescrip- 
tion of the land, or of the title, or of the terms to which it is sub- 
ject, though made without any fraudulent intention, will avoid the 
contract* Courts of equity have granted or refused their peculiar 
remedies in the case of contracts for the sale of land because of in- 
nocent misrepresentation,** but this has been because of principles 
peculiar to equity, and not because of the nature of thd contract. 
The same principles have been applied, and the same relief granted 
or refused, in the case of other contracts. 

Same — Contracts to Purchase Shares in Companies 

Another exception is in the case of contracts with the promoters 
of a corporation for the purchase of shares. It is said in an English 
pase : "Those who issue a prospectus holding out to the public the 
great advantages which will accrue to persons who will take shares 
in a proposed undertaking, and inviting them to take shares on the 
faith of the representations therein contained, are bound to state 
everything with strict and scrupulous accuracy, and not only to ab- 
stain from stating as fact that which is not so, but to omit no one 
fact within their knowledge, the existence of which might in any 

r« 2 Add. Cont | 688 ; 1 Sugd. Vend. 8. 

TT LdYingston v. Iron Co., 2 Paige, Ch.' (N, T.) 392; WUllams v. Spurr, 24 
Mich. 335. See "Vendor and Purchaser^'* Deo, JHff. {Key-yo,) | SS; Cent, Dig. 
U 38-^6. 

TtNote 93, Infra. 

T* Flight T. Booth, 1* Blng. N. G. 370; Jones y. Edney, 3 Camp. 285; In re 
Fawcett A Holmes, 42 Ch. Div. 156 ; Rayner t. Wilson, 43 Md. 440 ; McKln- 
non T. VoUmar, 75 Wis, 82, 43 N. W. 800, 6 L, R. A. 121, 17 Am. St. Rep. 178 ; 
Munroe ▼. Pritchett, 10 Ala. 785, 50 Am. Dec. 203 ; Rimer ▼. Dugan, 39 Miss. 
477, 77 Am. Dec. 687 ; Tyson t. Passmore, 2 Pa. 122, 44 Am. Dec. 181 ; Keat- 
ing y. Price, 58 Md. 532, at page 536; Gunby y. Sluter, 44 Md. 237; Foley y. 
Crow, 37 Md. 51; Mitchell y. McDougaU, 62 IlL 498; Baughmaq y. Gould, 45 
Mich. 481, 8 N. W. 73; Smith y. Richards, 33 Pet 26, 10 L. Ed. 42; Mulvey 
y. King, 39 Ohio St 491. See "Vendor and Purchaser,** Deo, Dig, {Key-No.) 
IS 33^8; Cent. Dig, H S8-66, 

•0 Price y. McCauley, 19 Eng. Law A Bq. 162 ; O'Rourk y. Percival, 2 Ball 
A B. 58 ; BrookB y. Hamilton, 15 Minn. 26 (GU. 10) ; Mohler y. Carder, 78 
Iowa, 582, 35 N. W. 647; Watson y. Baker, 71 Tex. 739, 9 S. W. 867. See 
•"Speeiflo Performance,** Dea Dig. {Key-No.) i 6S; Cent. Dig, |§ ISO-lU^i. 



Sg 136-188) MISBEPRB8ENTATION "M9 

degree affect the nature, extent, or quality of . the privileges and 
advantages which the prospectus holds out as inducements to take 
shares." ^* As said in a New York case ^ the promoters of a corpor - 
a tion occupy before its organ ization a position of trust and confi- • 
d gnce towards those whom they seek to induce to invest in the en- # *Ji 
tcoaase." 1^^"^^^ 

Same — Confidential Relations in General ^ 

All contracts, whatever mayibe the subject-matter, are uberrimae 
fidei, where the parties occupy a confidential relation towards each 
other, as in the case of contracts between an attorney and his client, 
a principal and his agent, a trustee and his cestui que trust, a guard- 
ian and his ward, a parent and his child, etc. The parties in such 
a ca se do not ^stand.ojp_equal ground; one of them reposes confi- 
dence in the other, and the latter, in dealing with the former, is 
held to the utmost good faith, and can gain no advantage by his 
dealings. Any misrepresentation or nondisclosure of mat eria l fac^ s 
will vitiate a contract between them .*' All the exceptions to the 
rule that innocent misrepresentation does not avoid a contract are 
based on the fact that a relation of confidence exists between the 
parties.** 

Same — Contracts of Suretyship 

The contract of suretyship has sometimes been treated as being 
within this excepted class of contracts, but as regards the formation 
of the contract it is not really so. To^ vitiate such a contract the 
misrepresgntation or nondisclosure must aniount to fraud ;^ut we 
shall se e, in treating o^ fraud, that n ondisclosure of facts^HTch 
there is a duty^ discl ose is sometimes regarded as fraud, witTiout 

•iNew Brunswick & O. R. Co. t. Mnggerldge, 1 Drew. & S. 881. And see 
Venezuela R. Ck>. t. Kisch, L. R. 2 H. L. 113 ; Peek y. Ourney, L. R. 6 H. L. 
403. Bee ^^Corporations;* Deo. Dig. i^ey-Vo.) | SO; OerU. Dig, \% 2U-264. 

u Brewster y. Hatch, 122 N. T. 84d, 25 N. B. 505, 19 Am. St Rep. 498. 
Bee **Corporation9,** Deo. Dig. (Key-No.) § 80; Cent. Dig. %% tU-^Si. 

ss Brooks y. llartln, 2 Wall. 70, at page 84, 17 L. Ed. 732; Baker y. 
Humphrey, 101 tj. S. 494, at page 502, 25 L. Ed. 1065 ; Jameff y. Steere, 16 
R. I. 367, 16 AtL 143, 2 L. R. A. 164 ; Smith y. Dayls, 49 Md. 470 ; McCk>n- 
key y. Cockey, 69 Md. 286, 14 AU. 465 ; Reed y. Peterson, 91 111. 2S8 ; Ward 
y. Armstrong, 84 111. 151; Zeigler y. Hughes, 55 111. 288; Norris y. Tayloe, 
49 IlL 17, 95 Am. Dec. 568 ; Casey v. Casey, 14 111. 112 ; Bowen y. Kutzner, 
1(97 Fed. 281, 93 C. C. A. 33 (brother and sister); post, p. 308. Bee '* At- 
torney and Client,'' Dec. Dig. {Key-No.) { 12S; Cent Dig. {{ ftS9^2Ji9; 
'•Guardian and Ward;* Dec. Dig. {Key-No.) ff 62, 6S, 99; Cent. Dig. {§ 288- 
299, S70, S71; "Parent and ChUd;* Deo. Dig. {Key-No.) § 9; Cent. Dig. {§ 
74, Ill-US; **Trust9;' Deo. Dig. {Key-No.) U ^^f ^^: Oent. Dig. U liS^ 

lis, m^ m. 

•4 2 Pom. Bq. Jur. { 902. 



270 REALITY OP CONSENT (Ch. 7 

r^ard to the^uestion of motive or design." Where the contract of 
suretyship has once been formed, the surety is entitled to be inform- 
ed of any agreement between the creditor and the debtor which al- 
ters their relations, or any circumstance which would give him a 
right to avoid the contract/* Failure of the creditor to give such 
information does not aiffect the formation of the contract, but mere- 
ly discharges the surety from any further liability, and therefore the 
question has nothing to do with our present discussion. 

Agent's Warranty of Authority 

To the rule th^t an innocent misrepresentation has no effect upon 
the liabilities of the parties another exception must be noted. A 
person who contracts as agent in effect represents that he has the 
y vy» authority of his principal, and if the representation is untrue he is 
^'^ liable to the other party for any resulting loss, even if he acted in 
good faith and in the belief that he had authority. By a fiction, the 
professed agent is deemed to warrant his authority.*^ 

Effect in Equity 

This rule as to the effect of misrepresentations is not adhered to 
in courts of equity. A false statement madevby one of the parties 
to the other has been held sufficient ground for refusing specific per- 
formance of the contract, though there was no fraud, and the state- 
ment was not a term in the contract ; " and a false representation 
believed to be true at the time it was made, and which was no part 
of the contract, has been held sufficient ground for setting the con- 
tract aside.** 

83 North British Ins. Co. v. Lloyd, 10 Exch. 523 ; Atlas Bank y. Brownell, 
9 R. I. 168, 11 Am. Rep. 231; Hamilton v. Watson, 12 Clark & F. 109; 
Guardian Fire & Life Assur. Co. v. Thompson, 68 Cal. 208, 9 Pac. 1 ; post 
p. 274. Bee "Contracts," Deo. Dig. (Key-No.) | 94; Cent. Dig. %% 420-4S0; 
"Principal and Surety,*' Dec. Dig. (Key-No.) ( S9; Cent. Dig. H 82^5. 

••Phillips V. Foxall, L. R. 7 Q. B. 666; Roberts v. Donovan, 70 Cal. 108, 
9 Pac. 180, 11 Pac 509 ; Evans v. Kneeland, 9 Ala. 42. But see Atlantic & 
P. Telegraph Co. v. Barnes, 64* N. Y. 385, 21 Am. Rep. 621 ; Jones v. United 
States, 18 WalL 662, 21 L. Ed. 867. Bee "Principal and Surety,'* Deo. Dig. 
{Key-No.) H 50, 97; Cent. Dig. §§ 146-168. 

«T Collen V. Wright, 8 E. & B. 647, 4 Jur. N. S. 357, 27 L. J. Q. B. 215, 6 
Wkly. Rep. 123, 92 E. C. L. 647 ; Cherry v. Colonial Bank, L. R. 3 P. C. 24, 
38 L. J. P. C. 49, 21 L. T. Rep. N. S. 356, 6 Moore P. O. N. S. 235, 17 Wkly. 
Rep. 1031, 16 Eng. Reprint, 714. And see Tiffany Ag. p. 368. Bee "Principal 
and Agent,** Deo. Dig. {Key-No.) § 136; Cetit. Dig. §} 447-450, 4'76-491. 

••Lamare v. Dixon, L. R. 6 H. L. 414, at page 428. Bee "Bpeciflc Per- 
formancer Dec. Dig. (Key-A^o.) § 53; Cent. Dig. H 160-17lMi' 

«• Traill V. Baring, 4 De Gex, J. & S. 318, 33 L, J. Ch. 521 ; Redgrave v. 
Hurd, 20 Ch. Dlv. 13 ; Newbigging v. Adam, 34 Ch. Div. 582 ; Brooks v. Ham- 
ilton, 15 Minn. 26 (GIL 10) ; Smith v. Richards, 13 Pet 26, 36. 10 L. Ed. 42 : 
Cowley V. Smyth, 46 N. J. Law, 380, 50 Am. Rep. 432 ; Florida v. Morrison. 



§§ 13&-138) HISBEPBESENTATION 271 

^ We have seen that the tendency of the common-law courts is to 
bring any statement which is material enough to affect consent, if 
possible, into the terms of the contract** Where the statement or 
representation is of this character — ^that is, where it is a "vital con- 
dition"— equity, says Sir William Anson, will give "the same relief, 
but upon a different and more intelligible principle/' In equity an 
innocent misrepresentation, if it furnishes a material inducement, 
gives a right to avoid or rescind a contract where capable of recis- 
sion.** 

Same — Equitable Estoppel 

A representation by a party to a contract, relied upon by the 
other, may, in equity, create an estoppel against him. This is 
variously termed an "estoppel by conduct," or an "estoppel in 
pais," or an "equitable estoppel." Thus, in a suit based on a 
promise to make a provision by will in consideration of marriage, 
the chancellor, while admitting that the transaction amounted 
to a contract, based his decision on "this larger principle: that 
where a man makes a representation to another, in consequence 
of which that other alters his position, or is induced to do any 
other act which is either permitted or sanctioned by the person 
making the representation, the latter cannot withdraw from the 
representation, but is bound by it conclusively." •• 

44 Mo. App. 529; Alker y. Alker (Sup.) 12 N. T. Sui^. 676; Jolce v. Taylor, 
6 Gm & J. (Md.) 64, 25 Am. Dec 825 ; Taymon y. Mitchell, 1 Md. Gh. 497 ; 
Kent y. Caicand, 17 Md. 299; Keating y. Price, 58 Md. 582; Thompson v. 
Lee, 81 Ala. 292; Conyerse y. Blumrich, 14 Mich. 109, 90 Am. Dea 230; 
Wilcox y. Uniyersity, 82 Iowa, 867; Alien y. Hart, 72 IlL 104; TwltcheU y. 
Bridge, 42 Vt 68; Frenzel y. Miller, 87 Ind. 1, 10 Am. Bep. 62; Baiikhead y. 
Alloway, 6 Cold. (Tenn.) 56; Foard y. McCJomb, 12 Bush (Ky.) 728. Bnt see 
Tone y. WUson, 81 lU. 529 ; Groff y. Bohrer, 85 Md. 827. Bee ^OanceUation 
of InttrumenU,'* Dee. Diff. (Key-No.) | 4; Cent. Dig. ^ 1. 

•0 Ante, p. 261. 

•1 Anson, Gontr. (8th Ed.) 155, 156, citing Derry y. Peak, 14 App. Caa. 847 ; 
Newbigging y. Adam, 84 Oh. Diy. 1SS2; Kennedy y. Panama, eta, Co., L. B. 
2 Q. B. 680. Bee ''CanceUatUm of InetrumeKte,*' Deo. Die. (Key-No.) | 4; 
Cent, Die. H i-^. 

•s Coyerdale y. Eastwood, L. B. 16 Eq. 121. And see Brown y. ViTheeler, 
17 Conn. 845, 44 Am. Dec 550; Thrall y. ThraU, 60 Wis. 508, 19 N. W. 353; 
Johnson v. Hnbbell, 10 N. J. Eg. 882, 66 Am. Dec. 778 ; Com. y. Moltz, 10 Pa. 
527, 51 Am. Dec. 499; Cowles y. Bacon, 21 Conn. 451, 56 Am. Dec. 871; 
Scndder y. Carter, 43 IlL App. 252 ; STEVENS y. LUDLUM, 46 Minn. 160, 
48 N. W. 771, 13 li. B. A. 270, 24 Am. St Bep. 210, Throckmorton, Cas. Con- 
tracts, 192; Dickerson y. Colgrove, 100 U. S. 578, 580, 25 L. Ed. 618; The 
Ottomwa Belle (D. C.) 78 Fed. 643. Bee **OontraoU," Deo. Dig, (Key-No.) 
i 97; OmU. Dig. %% ikt-W: '^SetoppeV* Deo. Dig. (Key-No.) U SB-Se; Cent. 
Dig. H Itl-lJ^ 



272 BBALITT OF CONSENT (Ch. T 

* 

\ FRAUD 

139. Fraud is a false representation of a material fact, or nopdis- 
closure of a material fact under such circumstances that it 
amounts to a false representation, made with knowledge 
of its falsity, or in reckless disregard of whether it is true 
or false, or as of personal knowledge, with the intention 
that it shall be acted upon by the other party, and which 
is acted upon by him to his injury. In detail: 

(a) There must, as a rule, be a false representation, and not a 

mere nondisclosure; but nondisclosure or conceal- 
ment is equivalent to a false representation — 

(1) Where active steps are taken to prevent discovery of 

the truth. 

(2) Where, though the representation made is true as far 

as it goes, the suppression of facts renders it in fact 
untrue. 

(3) Where, under the circumstances, there is a duty to dis- 

close the facts suppressed, so that failure to disclose 
them is an implied representation that they do not 
exist. 

(b) The representation must be of a past or existing fact; and 

tiieref ore fraud cannot result from — 

(1) Expressions of opinion, belief, or expectation. 

(2) Promises or expressions of intention. A representa- 

tion, however, that a certain intention exists, when 
it does not exist, is a false representation of an exist- 
ing fact. 

(3) Representiations as to the law, as a rule. 

(c) The representation must be of a material fact. 

(d) The representation must be of such a character, or must be 

made under such circumstances, that the other party 
has a right to rely on it. Fraud, therefore, cannot be 
predicated upon — 

(1) Commendatory expressions as to value, prospects, and 

the like. 

(2) False representations in cases where the means of 

knowledge are at hand, but the other party does not 
use them (in some jurisdictions). 

(e) The representation must be made with knowledge of its 

falsity. It is regarded as ''knowingly** false— 
(1) If actually known to be false. 



I 189) FRAX7D , 273 

(2) If made in reckless disregard of whether it is true or 

false. 

(3) If the fact is susceptible of knowledge, and the represen- 

tation is made as of the party's personal knowledge 
(in most jurisdictions) . 

(f) The representation need not be made directly to the other 

party, but it must be intended to reach him, and to be 
acted upon by him. . 

(g) The representation must deceive; that it, it must be relied 

upon by the other party, and must induce him to act. 
(h) It must result in injury. 

Fraud is a False Representation 

Subject to exceptions to be presently explahied, a mere nondis- 
closure of fact, without more, is not fraHid, whatever the intention 
may be. There must be some active attempt to deceive, either 
by a statement which is false, or by a representation, true as far as 
it goes, but accompanied with such a suppression of facts as to 
make it convey a false impression, or else there must be a con- 
cealment of facts which the party is under a duty to disclose. 

Same — Silence or Nondisclosure of Facts 

Mere silence or nondisclosure of facts may be such a misrepre- 
sentation as will avoid a contract uberrima fidei, but otherwise 
it generally has no effect, whatever may be the Intention in fail- 
ing to make the disclosure. Nondisclosure, even with intent to 
deceive, does not amount to a fraud which will render a contract 
voidable, or sustain an action for deceit, unless there is active 
concealment or a suppression of facts which there is a duty to 
disclose.** For instance, in an English case, where the defendant 
had let to the plaintiff a house which he knew was required for 

•• Peek T. Gumey, L. R. 6 H. L. 403 ; Dambmann t. Schultln^, 75 N. Y. 55 ; 
People's Bank of City of New York v. Bogart, 81 N. Y. ia3, 87 Am. Rep. 481 ; 
Hadley v. Importing Co., 13 Ohio St 502, 82 Am. Dec. 454; Rlson y. New- 
berry, 90 Va. 613, 18 S. E. 916; Laldlaw v. Organ, 2 Wheat 178, 4 L. Ed. 
214 ; Williams v. Spurr, 24 Mich. 835 ; Crowell v. Jackson, 63 N. J. Law, 656, 
23 Atl. 426; Cleaveland v. Richardson, 132 U. S. 318, 10 Sup. Ct 100, 33 L. 
Ed. 384; Cochrane v. Halsey, 2.i Minn. 52; West t. Anderson, 9 Conn. 107, 
21 Am. Dec. 737; Juzan v. Toulmin, 9 Ala. 662, 44 Am. Dec. 448; Codding- 
ton v. Goddard, 16 Gray (Mass.) 463. Failure of the purchaser of land to 
disclose to the vendor the fact that there is mineral under it does not amount 
to fraud. Harris v. Tyson, 24 Pa. 347, 64 Am. Dec. 661 ; Butler's Appeal, 26 
Pa. 63 ; Smith t. Beatty, 37 N. C. 456, 40 Am. Dec. 435. See, also, as to con- 
cealment by purchaser, Neill v. Shamburg, 158 Pa. 263, 27 AtL 992; ante, p. 
270, note 85. See **Contract8;' Dec. Dig, (Kcy-yo.) { 94; Cent Dig, H ttO- 
4S0. 

Clabk Cont.(3d Ed.) — 18 



274 BEAUTY OF CONSENT (Ch. 7 

immediate occupation, without disclosing that it was in a ruinous 
condition and unfit for habitation, it was held that an action for 
fraud would not lie. ''It is not pretended/' it was said, ''that 
there was any warranty, express or implied, that the house was 
fit for immediate occupation ; but it is said that, because the de- 
fendant knew that the plaintiff wanted it for immediate occupa- 
tioVi, and knew that it was in an unfit and dangerous state, and 
did not disclose that fact to the plaintiff, an action of deceit will 
lie. The declaration does not allege that the defendant made any 
misrepresentation, or that he had reason to suppose that the plain- 
tiff would not do what any man in his senses would do, viz. make 
proper investigation, and satisfy himself as to the condition of. 
the house before he entered upon the occupation of it. There 
is nothing amounting to deceit" •* 

The fact that the purchaser of goods fails to disclose the fact 
that he is insolvent does not amount to fraud if he intends to pay 
for them, and is not asked as to his financial condition.*' If, 
however, at the time of the purchase, he does not intend to pay, 
he is guilty of fraud, for he impliedly represents that he does 
intend to pay ; ** and it has been held by a^ number of courts that. 

•^Keates y. Lord Cadogan, 10 C. B. {$91. See, also/ Fisher ▼. Llghthall, 4 
Mackey (15 D. G.) 82, 54 Am. Rep. 258; Lucas v. Coulter, 104 Ind. 81, 8 N. E. 
G22; Foster y. Peyser, 9 Cush. (Mass.) 242, 57 Am. Dec 4S. Bee **0on- 
tracts,*' Deo, Dig. (Key-Vo.) % 94; Cent, Dig, §§ 420-4S0. 

•« Talcott y. Henderson, 31 Ohio St 182, 27 Am. Rep. 501 ; Powell y. Brad- 
lee, 9 GUI & J. (Md.) 220; Morrill y. Blackman, 42 Conn. 324; Zucker y. 
Karpeles, 88 Mich. 413, 50 N. W. 373 ; Hotchkln y. Bank, 127 N. T. 329, 27 
N. E. IOjO; Le Grand y. Bank, 81 Ala. 123, 1 South. 400, 60 Am. Rep. 140; 
Retlcker y. Katzensteln, 20 111. App. 33; Bldault y. Wales, 20 Mo. 546, 64 
Am. Dec 205 ; WHson y. White, 80 N. C. 280. See **8ale9,*' Deo. Dig, (Key- 
No.) I 45; Cent. Dig. i 94. 

••Talcott y. Henderson, 31 Ohio St 162, 27 Am. Rep. 501; Stewart y. 
Emerson, 52 N. H. 301 ; Donaldson y. Farwell, 93 U. S. 633, 23 L. Ed. 903 ; 
Ex parte Whlttaker, 10 Ch. App. 446; BurrlU y. Steyens, 73 Me. 395, 40 Am. 
Rep. 366; Beldlng Bros. A Co. y. Frankland, 8 Lea (Tenn.) 67, 41 Am. Rep. 
630; Harris y. Alcock, 10 GUI & J. (Md.) 226, 32 Am. Dec 158; WUmot y. 
Lyon, 49 Ohio St 296, 34 N. E. 720 ; Nichols y. McMlchael, 23 N. Y. 266, 80 
Am. Dec 259; Farwell y. Hanchett, 120 111. 573, 11 N. E. 875; Brower y. 
Goodyer, 88 Ind. 572; Ross y. Miner, 64 Mich. 204, 81 N. W. 185; Id., 67 
Mich, 410, 35 N. W. 60; Ayres y. French, 41 Conn. 142; Jordan y. Osgood, 
109 Mass. 457, 12 Am. Rep. 731; Dow y. Sanborn, 3 Allen (Mass.) 181; Yea- 
ger Milling Co. y. Lawler, 39 La. Ann. 572, 2 South. 398; Allen y. Hartfield, 
76 111. 358; Devoe y. Brandt, 53 N. Y. 462; Hennequin.y. Nay lor, 24 N. Y. 
139; Camahan y. BaUey (C. C.) 28 Fed. 519; Fechhelmer y. Baum (C. C.) 
37 Fed. 167, 2 L. R. A. 153 ; Shlpman y. Seymour, 40 Mich. 274 ; Wright v. 
Brown, 67 N. Y. 1; Bldault y. Wales, 20 Mo. 546, 64 Am. Dec 206; Des 
Farges y. Pugh, 93 N. C. 31, 53 Am. Rep. 446. There are a few decisions to 
the contrary. Smith y. Smith, 21 Pa. 367, 60 Am. Dec 61; Bughman y- 



§ 139) FRAUD 275 

if he has no reasonable expectation of being able to pay, it is equiv- 
alent to an intention not to pay.*' 

Active efforts to conceal a fact — as, for instance, where obstacles 
are thrown in the way to prevent the other party's inquiries ixom 
resulting in its discovery, or his attention is diverted for such a 
purpose — are equivalent to a false representation.** So, also, if 
a person makes a representation as to facts which is true as far 
as it goes, but intentionally suppresses other facts 30 as to make 
the representation convey a false impression, this is a false repre- 
sentation, and not a mere nondisclosure. The concealment or 
withholding of that which is not stated makes that which is stated 
absolutely false.** 

¥,^g\ p^ppptinn^^ ^^ flip riilp that nnnfliRrlnsiire is not_Jrau4..He 

in the distinctio n between m ere silence where there is no duty 

Bank, 169 Pa. 94, 28 Ati. 200 ; Bell y. Ellis, 83 CaL 620. Bee ''^TaZet," Dec. 
Dig. (Key-Na.) | i5; Cent. Dig. | 94. 

•TTalcott T. Henderson, 81 Ohio St 162, 27 Ain. Rep. SOI; Jaffrey v. 
Brown (G. O.) 29 Fed. 476 ; Elsasg v. Harrington, 28 Mo. App. 800 ; Whittin 
V. Fitzwater, 129 N. Y. 62G, 29 N. E. 298 ; Dalton t. Thurston, 15 R. I. 418, 
7 Atl. 112, 2 Am. St Rep. 905. But see, contra. Com. y. Eastman, 1 Gush. 
(Mas&) 189, 48 Am. Dec 596; Biggs y. Barry, 2 Gnrt 259, Fed. Caa. No. 
1,402 ; BurrUl y. Stevens, 73 Me. 895, 40 Am. Rep. 86a It has eyen been held 
that the fact of insolvency and concealment is sufficient to take the case to 
the jury on the question of intention not to pay. Edson y. Hudson, 83 Mich. 
450, 47 N. W. 847 ; Slagle & Co. y. Goodnow, 46 Minn. 581, 48 N. W. 402. 
Bee **Bales*' Deo. Dig. (Keu-No.) ^ 45; Cent. Dig. | $4. 

•• Turner y. Harvey, Jacob 169 (Lord Eldon) ; Walters y. Morgan, 8 De 
G. F. & J. 718; Croyle v. Moses, 90 Pa. 250, 85 Am.^ Rep. 654; Matthews v. 
Bliss, 22 Pick. (Mass.) 48; Firestone y. Werner, 1 Ind. App. 298, 27 N. E. 
623; Kenner v. Harding, 85 111. 265, 28 Aul Rep. 615; Kohl v. Idndley, 89 
IlL 195, 201, 89 Am. Dea 294 ; Ck>gel v. Knlseley, 89 IlL 598, 601 ; Roseinan 
y. Ganovan, 43 Gal. 110; Crompton v. Beedle, 83 Vt 287, 75 Atl. 831^ 30 L. 
R. A. (N. S.) 748, Ann. Gas. 1912A, 399 (active maneuvers of purcliaser to 
conceal from vendor existence of quarry on land) ; Merchants* Bank of Bal- 
timore v. Campbell, 75 Va. 455 (concealment of Luray Cavern under land 
purchased for $480). Bee "ContracU,** Deo. Dig, (Key-No.) i 9i; Cent. Dig. 
fi 420-4S0. 

•9 Mallory y. Leach, 35 Vt 156, 82 Am. Dec. 625; Hadley y. Clinton Imp. 
Co., 13 Ohio St 502, 82 Am. Dec 454; 0>le8 v. Keifnedy, 81 Iowa, 360, 46 
N. W. 1088, 25 Am. St Rep. 503; Kidney v. Stoddard, 7 Meta (Mass.) 252; 
Newell v. Randall, 32 Minn. 171, 19 N. W. 972, 50 Am. Rep. 5G2 ; Van Houten 
y. Morse, 162 Mass. 414, 38 N. E. 705, 26 L. R. A. 430, 44 Am. St Rep. 373. 
"If the presentation of that which is true creates an impression which is 
false, it is, as to him who, seeing the misapprehension, seeks to profit by it, 
a case of false representation.*' Lomerson v. Johnston, 47 N. J. Eq. 312, 20 
Aa 675, 24 Am. St Rep. 410. And see Busch v. Wilcox, 82 Mich. 315. 40 
N. W. 940 ; Howard v. Gould, 28 Vt 523, 67 Am. Dec. 728 ; Baker v. Rocka- 
brand, 118 111. 365, 8 N. E. 456. Bee "ContracU,'* Deo. Dig. (Key-No,) | 04; 
Cent. Dig. %% 420-4^0. 



276 BBALITY OF CONSENT (Ch. 7 

to speak, and concealment oi facts which are pecul iarly yit^l^" t^^ 
knowledgre of the party concealing: them, and whi ch, under the 
circum stances, he is^ ou nd in good faith to disclose . "In an 
action of deceit," it has been said by the supreme court of the 
United States, "it is true that silence as to a material fact* is not 
necessarilyi as matter of law, equivalent to a false representation. 
But mere silence is quite different from concealment 'Aliud est 
tacere, aliud celare' — a suppression of the truth may amount. to 
a suggestion of falsehood. And if, with intent to deceive, either 
party to a contract of sale conceals or suppresses a material fact 
which he is in good faith bound to disclose, this is evidence of, 
and equivalent to, a false representation, because the concealment 
or suppression is, in effect, a representation that what is disclosed 
•is the whole truth. The gist of the action is fraudulently produc- 
ing a false impression upon the mind of the other party; and, if 
this result is accomplished, it is unimportant whether the means 
of accomplishing it. are words or acts of the defendant, or his 
concealment or supp'tession of material facts not equally within 
the knowledge or reach of the plaintiff." * 

In contracts of sale, disclosure is not ordinarily incumbent on 
the seller. The rule is caveat emptor.* It has even been held 

1 Stewart y. Cattle^Ranch Co., 128 U. S. 383, 9 Sup. Ct 101, 32 L. Ed. 439 ; 
Laldlaw y. Organ, 2 Wheat 178, 4 L. Ed. 214; Smith ▼. Countryman, 80 
N. T. 655 ; Griel y. Lomax, 89 Ala. 420, 6 South. 741 ; Loewer y. Harris, 6 C. 
O. A. 894, 57 Fed. 868; George y. Johnson, 6 Humph. (Tenn.) 86, 44 Am. 
Dec. 288; Beard y. Campbell, 2 A. E. Marsh. (Ky.) 125, 12 Am. Dec. 362; 
Peebles v. Stephens, 8 Bibb (Ky.) 824, 6 Am. Dec 660; Waters y. Mattlngley, 
1 Bibb (Ky.) 244, 4 Am. Dec. 631; Fish y. Cleland, 33 HL 238; Mitchell y. 
McDougall, 62 111. ^98 ; Firestone y. Werner, 1 Ind- App. 293, 27 N. E. 623 ; 
Morgan y. Owens, 228 111. 598, 81 N. E. 1135. A person taking a bond for the 
future good conduct of an agent already in hU employment must communi- 
cate to a surety his knowledge of the past criminal conduct of such agent In 
the course of his past employment The mere nondisclosure of such knowl- 
edge. Irrespective of motive or design. Is a fraud, which will Invalidate the 
bond. Guardian Fire & Life Assur. Co. v. Thompson, 68 CaL 208, 9 Pac. 1 ; 
State y. Soo/, 39 N. J, Law, 135; Dlnsmore v. Tldball, 34 Ohio St 418; Rob- 
erts y. Donovan, 70 CaJ. 108, 9 Pac. 180, 11 Pac. 599. See ante, p. 270. A 
man may avoid his promise to m^rry a woman If she concealed from him the 
fact that she had previously given birth to a bastard child, or was of Im- 
moral character. Bell v. Eaton, 28 Ind. 468, 92 Am. Dec. 329; Palmer v. 
Andrews, 7 Wend. (N. Y.) 143; Berry v. Bakeman, 44 Me. 164; Goodall v. 
Thurman, 1 Head (Tenn.) 208; Butler v. Eschleman, 18 111. 44; Capehart v. 
Garradlne, 4 Strob. (S. C.) 42; post, p. 288. Bee "Fraud/* Dec, Dig, (Keu- 
yo,) §§ 1. 6, SS; Cent. Dig. | 1-8. 

2 Smith y. Hughes, L. R. 6 Q. B. 597; Laldlaw v. Organ, 2 Wheat 178, 4 
L. Ed. 214 ; People's Bank of City of New York v. Bogart, 81 N. Y. 101. 37 
Am. Rep. 481; Klntzlng v. McElrath, 6 Pa. 467; Cogel v. Kniseley, 89 III, 
598. See "Bales,*' Dec. Dig. {Key-No.) { 41; Cent. Dig. ^ 84. 



fi 189) FBAUD 277 

that the seller is not bound to communicate the existence of a 
latent defect, such as a hidden disease of an animal, unless, by 
act or implication, he represents that such defects do not exist.* 
But it is generally held in this country that the intentional nonr 
disclosure of such a defect by the seller, when he knows or has 
reason to know that it is unknown to the buyer, is fraudulent.* 
So where premises leased are infected with a contagious disease, 
or otherwise subject to a nuisance which is prejudicial to life 
or health, it has been held that there is a duty to disclose the 
fact, and that concealment is a fraud.' 

Mistake as to Nature of Promise Known to Other Party 

A mistake on the part of one of the parties to a contract, as 
a misunderstanding in respect to the nature or qualities of the 
subject-matter, or a mistake in fixing or expressing the terms, 
not induced by the conduct of the other party, has as a rule no 
effect upon the contract.* But the law will not allow one party 
to accept a promise, which he knows that the other party under- 
stands in a different sense from that in which he understands it.'^ 
If the mistake or misunderstanding of the one party as to the 
nature of the promise is known to the other, or if the other has 

s Ward ▼. Hobbs, 3 Q. B. DIt. 150, 4 App. Gas. 13; Beninger t. Corwin, 24 
N. J. Law, 257 ; Paul v. Hadley, 23 Barb. (N. Y.) 521 ; Morris v. ThompsoD, 
85 111. 16. See "Salee,** Dec. Dig. {Key-Vo,) % 4I; Cent. Dig. i 8^. 

« Hoe y. Sanborn, 21 N. Y. 552, 78 Am. Dec. 168 ; French t. Vinlng, 102 
Mass. 132, 3 Am. Rep. 440 ; Marsh t. Webber, 13 Minn. 109 (Oil. 99) ; Cecil 
T. Spurger, 82 Mo. 462, 82 Am. Dee. 140; Patterson t. Kirkland, 34 Miss. 423; 
Johnson t. Wallower, 18 Minn. 288 (Oil. 262); Cardwell t. McClelland, 3 
Sneed (Tenn.) 150 ; Waters t. Mattingley, 1 Bibb (Ky.) 244, 4 Am. Dec 681 ; 
Maynard v. Maynard, 49 Vt 297; Paddock t. Strobridge. 29 Vt 470; Ora- 
ham T. Stiles, 88 V t 578 ; Dowling t. Lawrence, 58 Wis. 282, 16 N. W. 552. 
Sale of cattle known to be infected with contagious disease: Jeffrey t. Bige- 
low, 13 Wend. (N. Y.) 518, 28 Am. Dec. 476; GRIGSBY v. STAPLBTON, 94 
Mo. 428, 7 S. W. 421, Throckmorton, Ca& Contracts, 187. The rule does not 
apply if the sale is "with all faults." West t. Anderson, 9 Ck>nn. 107, 21 Am. 
Dec. 737; Whitney t. Boardman, 118 Mass. 242. Otherwise if seller makes 
efforts to prevent buyer from discovering defects. West v. Anderson, supra ; 
note 98, supra. Bee "iSfalet," Deo. Dig. (Key-No.) % U; Cent. Dig. § 84. 

ft Minor V. Sharon, 112 Mass. 477, 17 Am. Rep. 122 ; Cesar v. Karutz, 60 N. 
Y. 229, 19 Am. Rep. 164; Cutter v. Hamlen, 147 Mass. 471, 18 N. E. 397, 1 
L. R. A. 429. See ''Sales;* Dec. Dig. (Key-No.) { 41; Ceni. Dig. { 84. 

• Scott V. Littiedale, 8 El. & Bl. 815 ; People's Bank v. Bogart, 81 N. Y. 101. 
87 Am. Rep. 481; Laldlaw v. Organ, 2 Wheat 178, 4 L. Ed. 214; Borden v. 
RaUroad Co., 113 N. C. 570, 18 S. E. 392, 37 Am. St Rep. 632; Griffin v. 
O'Neil, 48 Kan. 117, 29 Paa 143 ; Seeley v. Traction Co.. 179 Pa. 334, 36 Att. 
229; Brown v. Levy, 29 Tex. Civ. App. 389, 69 S. W. 255. See ^'Oontracte,*' 
Dec Dig. (Key-No.) { 9S; Cent. Dig. U 41S-4i9. 

V Anson, Cent (8th Ed.) 13a 



278 REALITY OF CONSENT (Ch. T 

reason to know it, the contract is voidable.* Thus where a per- 
son was sued for refusing to accept some oats which he had 
agreed to buy from the plaintiflf, on the ground that he had agreed 
and intended to buy old oats, and that those supplied were new, 
the jury were told that, if the plaintiff knew that the defendant 
"thought he was buying old oats," then he could not recover. 
The court of review, however, held that this was not enough to 
avoid the sale; that in order to do so the plaintiff must have 
known that the defendant "thought he was being promised old 
oats." It was not knowledge of the misapprehension of the quali- 
ty of the oats, but knowledge of the misapprehension of the quality 
promised, which would defeat a recovery.* So where the seller, 
intending to offer cattle for $261.50, by a slip of the tongue offered 
them for $161.50, and the buyer, having good reason to suppose 
that the price named was a mistake, accepted the offer and paid 
$20 on account, and the seller tendered back the $20, and repudi- 
ated the sale, it was held that the buyer was not entitled to main- 
tain replevin.** And where by mistake the plaintiff in compiling 
a rate sheet printed the fare at $21.25 instead of $36.70, and the 
defendant, who had discovered the mistake, purchased tickets- at 
the printed price, it was held that the plaintiff could rescind.** 

This subject is treated by Sir William Anson and many other 
writers under mistake, but most of the courts of this country 
treat it as a question of fraud. The latter classification would 
seem the more appropriate, since the effect of a mistake of the char- 
acter under consideration is merely to render the contract voidable, 
and not void. 

• Smith y. Hughes, L. R. 6 Q. B. 697; Thayer ▼. Knote, 59 Kan. 181, 62 
Pac. 433. Sir WiUiam Anson says "void.** Anson, Ck)nt (8th Ed.) 13a See 
"fif<ile«," Dec. Dig. {Key-No.) | 96; Cent. Dig. §| W, Si. 

• Smith y. Hughes, supra. Bee **Contracts** Dec. Dig. {Key-No.) ^ 93; Cent 
Dig. II kl5-Jkl9. 

10 Harran y. Foley, 62 Wis. 684, 22 N. W. 837. See, also, Webster y. Cedl, 
30 Beay. 62 ; Tamplin y. Jones, 16 Ch. D. 221 ; Gerrard y. Frankel, 30 Beay. 
445; Eyerson y. Granite Co., 66 Vt. 658, 27 AtL 320. Bee ''OontracU,^ Deo. 
Dig. {Key-No.) | 9S; Cent. Dig. %% HS^W. 

11 Shelton y. Ellis, 70 Ga. 297. A contract to furnish the goyemment with 
many articles at stipulated prices, among them shucks at 60 cents per pound, 
was unenforceable as to the shucks, where the goyemment showed that they 
were worth from |12 to $35 per ton ; that it was customary to buy them by 
the hundred weight ; and that the seller failed to strike out the word "pounds" 
on the printed form of proposal, and to insert "hundred weight" instead, 
though the seller insisted that there was no mistake on his part Hume y. 
United States, 132 U. S. 406, 10 Sup. Ct 134, 33 L. Ed. 393. See. also, Mof- 
fett, HodgklDS & Clarke Co. y. City of Rochester, 178 U. S. 373, 20 Sup. Ct 
957, 44 L. Ed. 110& Bee *'ContracU» Deo. Dig. {Key-No.) | 9S; Cent. Dig, 
II 415-419. 




(Tph >f^ iJT-.^ 



§ .139) FRAUD 279 

Character of Representations — Opinion or Expectation 

To constitute fraud, the representation must be of a past or 
existing fact. What has been said in treating of misrepresentation 
is equally applicable here. A mere expression of opinioh, belief, 
or expectation, however unfounded, will not invalidate a contract, 
nor give cause for an action for deceit.** 

If, for instance, the seller of property says it is worth so much, 
this is a mere expression of opinion upon which the buyer may 
or may not act, just as he chooses.** So, also, where a person 
makes a false representation as to the harvest which land sown 
in certain crops will produce,** or as to the cubic contents of a 
piece of grading which he employs another to do,** or as to what 
it will cost to build a house,** these are all mere expressions of 
opinion, and, as a rule, do not amount to fraud.*^ A statement 

IS GORDON T. PARMELEE, 2 Allen (Mass.) 212, Throckmorton, Caa. Con- 
tracts, 189; Gordon y. Butler, 105 U. S. 553, 26 L. Ed. 1166; Mooney v. Miller, 
102 Mass. 211 ; Sawyer ▼. Prickett, 19 WalL 146, 22 L. Ed. 105 ; Allen y. Hart, 
72 111. 104 ; Bnschman y. Codd, 52 Md. 207 ; Ellis y. Andrews, 56 N. Y. 83, 15 
Am. Rep. 379; Chrysler y. Canaday, 90 N. Y. 272, 43 Am^ Rep. 166; Beard y. 
Bliley, 3 Colo. App. 479, 84 Pac. 271 ; Montreal Lumber Co. y. Mlhills, 80 Wis. 
540, 50 N. W. 507 ; Southern Deyelopment Co. y. Silva, 125 U. S. 247, 8 Sup. 
Ct 881, 81 Ih Ed. 678; Sheldon y. Dayidson, 85 Wis. 138, 55 N. W. 161; Nas^ 
y. Trust Co.. 159 Mass. 437, 34 N. E. 625 ; Reeyes y. Corning (0. 0.) 51 Fed. 
774. But see Grim y. Byrd, 82 Grat (Va.) 293, 801, where it is said, per 
Staples, J.: "But eyen a matter of opinion may amount to an affirmation, 
and be the Inducement to a contract, especially where the parties are not 
dealing upon equal terms, and one of them has, or is presumed to have, means 
of information not equally open to the other." See **Contract$,*' Deo. Dig, 
{Key No.) ^ 9S; Cent. Dig. {§ 415^kl9, 

!• Lindsay Pet Co. y. Hurd, L. R. 5 P. a 243; Simar y. Canaday, 63 N. Y. 
298, 13 Am. Rep. 523 ; Shanks y. Whitney, 66 Vt 406, 29 AtL 367 ; Johnson y. 
Seymour, 79 Mich. 156, 44 N. W. 344 ; Geddes' Appeal, 80 Pa. 442 ; Doran y. 
Eaton, 40 Minn. 85, 41 N. W. 244; Belz y. Keller (Ky.) 1 S. W. 420; NoeUing 
y. Wright, 72 111. 390; Lockwood y. Fitts, 90 Ala. 150, 7 South. 467; Gordon 
y. Butler, 105 U. S. 553, 26 L. Ed. 1166; Cagney y. Cuson, 77 Ind. 494; Lynch 
y. Murphy, 171 Mass. 307» 50 N. E. 623. See "Sale$,*' Dec. Dig. (Key-No.) t 
43; Cent. Dig. §f SS-IOO. 

1* Holton y. Noble, 83 CaL 7, 23 Pac. 58. See ''Contracts,*' Deo. Dig. (Key- 
No.) i 94; Cent. Dig. S§ 420'4S0. 

i» East y. Worthington, 88 Ala. 537, 7 South. 189. See ''OontraoU,** Dec. 
Dig. (Key-No.) | 94; Cent. Dig. §| 420-430. 

!• Sweney y. Davidson, 68 Iowa, 386, 27 N. W. 27a See ** Contracts,** Dec 
Dig. (Key-No.) § 94; Cent. Dig. §| 420-4S0. 

17 Representations as to the speed of a horse not made as of personal 
knowledge. State y. Cass, 52 N. J. Law, 77, 18 Atl. 97Z Representation that 
a stalUon will not produce sorrel colts. Scroggin y. Wood, 87 Iowa, 497, 54 
N. W. 437. Representations as to solvency and credit See Homer v. Perkins, 
124 Mass. 431, 26 Am. Rep. 677 ; Yeager Milling Co. y. Lawler, 89 La. Ann. 
572, 2 South. 898; Childs y. Merrill, 63 Vt 463, 22 AtL 626, 14 L. R. ^ 264. 



280 REALITY OF CONSENT (Ch. 7 

as to the dimensions of land is a statement of fact ; ^* but where 
the boundaries are corr^tly pointed out, a representation as to 
the area embraced therein is an expression of opinion.^* 

Sanle — Statement of Intention, Expectation, or Promises 

A representation of fact is a statement that a thing was or is^ 
and does not, therefore, include expressions of intention or expec- 
tation, or promises, or other representations that a thing shall be.** 
Notwithstanding this, a representation of intention may amount to 
a fraudulent representation. The law makes a distinction between 
a promise which the promisor, when he makes it, intends to per- 
form, and one which he intends to break. In the first case he rep- 
resents truly enough his intention that something shall take place 
in the future, while in the second case he misrepresents his exist- 
ing intention. He not merely makes a promise which is ultimately 
broken, but when he makes it he represents his state of mind to 
be other than it really it.** It is therefore, as we have already 
seen, very generally held that if a man buys goods, not intending at 
the time to pay for them, he makes a fraudulent representation.'* 

Same — Misrepresentation of Law 

As a rule, misrepresentation of law does not amount to a fraud- 
ulent representation for which an action of deceit will lie, nor make 

And see post, p. 280. Bee **Contracta,'* Deo. Dig. (Key-No.) ( $4; Cent. Dig. 
M 420'-Ji30; ''Fraud;* Deo. Dig. {Key-No.) §§ 11, IS; Cent. Dig. {{ 5, 5, 12, 13. 

i« Hchelberger v. MUls Land & Water Co., 9 Cal. App. 628, 100 Pac. 117. 
See "Vendor and Purchaser,'* Deo. Dig. (Key-No.) || Si, US; Cent. Dig. || 
S9, tOl. 

i» GORDON y. PARMELEB, 2 AUen (Mass.) 212, Throckmorton, Oas. Con- 
tracts, 189. See **Vendor and Purchaeer," Deo. Dig. (Key-No.) | Si; Cent. 
Dig. I SO. 

30 Dawe v. liforrls, 149 Mass. 188, 21 N. E. 313, 4 L. R. A. 158, 14 Am. St 
Rep. 404; ^urrell's Case, 1 Ch. Div. 652; Knowlton y. Keenan, 146 Mass. 
86, 15 N. E. 127, 4 Am. St Rep. 282; Saunders y. McCUntock, 46 Mo. App. 
216; Sheldon v. Dayidson, 85 Wis. 138, 55 N. W. 161; Lawrence y. Gayetty^ 
78 Cal. 126, 20 Pac. 382, 12 Am. St Rep. 29 ; Haenni y. Bleisch, 146 IlL 262, 
34 N. E. 153; Balue y. Taylor, 136 Ind. 368, 86 N. E. 269; Birmingham 
Warehouse & Elevator Co. y. Land Co., 93 Ala. 549, 9 South. 235; Huber y. 
Guggenheim (C. C.) 89 Fed. 598. But see Williams y. Kerr, 152 Pa. 560, 25 
Atl. 618 ; Moore y. Cross (Tex. Ciy. App.) 26 S, W. 122. Representation that 
stock sold will pay a certain dividend. Robertson v. Parks, 76 Md. 118, 24 
Atl. 411. See ''Contracts,** Dec. Dig. (Key-No.) § $4; Cent. Dig. If 420-iSO. 

«i01d Colony Trust Co. y. Traction Co. (C. O.) 89 Fed. 794; Russ Lumber 
& Mill Co. y. Water Co., 120 Cal. 521, 52 Pac. 995, 65 Am. St Rep. 186 ; South- 
em Loan & Trust Co. v. Gissendaner, 4 Ala. App. 523, 58 South. 737 ; Mutual 
Reserve Life Ins. Co. v. Seidel, 52 Tex. Civ. App. 278, 113 S. W. 945. Contra: 
Miller y. Sutliff, 241 IlL 521, 89 N. E. 651, 24 L. R. A. (N. S.) 735w Be^ 
"Contracts,** Dec. Dig. (Key-No.) | 94; Cent. Dig. U 420-430. 

2« Ante, p. 274. 



S 139) FRAUD 281 

a contract voidable. A contract, therefore, cannot, unless there are 
peculiar circumstances of fraud, or a relation of trust and confi- 
dence between the parties,"* be rescinded by one party on the 
ground that the other falsely represented the legal effect of the con- 
tract, or otherwise misrepresented the law.** As already stated, pri- 
vate right of ownership, although it be the result also of a matter 
of law, is regarded as matter of fact, and ignorance of foreign laws, 
which include the laws of a sister state, is regarded as ignorance 
of fact, and misrepresentation in regard to either is misrepresenta- 
tion of fact.*' 

Same — Materiality 

Not only must the representation be of a fact, but it must be of a 
material fact. A false representation of an immaterial fact, what- 
ever may have been the intention, has no effect.** It may often 
be difficult to say when a representation is material, but it is prob- 
ably safe to say that it is always itiaterial if, had it been known to 
be false, the contract would not have been entered into.*' 

Same — Made by Party to Contract 

In order that false representations may affect the validity of a 
contract, they must be made by a party to the contract, or by his 

«» Berry v. Whitney, 40 Mich. 71; Havlland v. WUlets, 141 N. T. 35, 35 N. 
E. 958; Motherway y. Wall, 168 Mass. 333, 47 N. B. 135. Bee "Contracts," 
Dec. Dig. (Key-Vo.) | 9k; Cent. Dig. §§ 420-4S0. 

«* Upton V. Tribllcock, 91 U. S. 45, 23 Ix Ed. 203; Fish v. Cfleland, 88 111. 
238; ^Vheaton v. Wheaton, 9 CoDn. 96; Grant t. Grant, 56 Me. 573; Bank 
of United States v. Daniel, 12 Pet 32, 9 L. Ed. 989 ; Pinkham y. Gear, 3 N. H. 
163; Clem y. Railroad Co., 9 Ind. 488, 68 Am. Dec. 653; iEtna Ins. Go; y. 
Reed, 33 Ohio St 293; Townsend y. Cowles, 31 Ala. 428; Sims y. FerriU, 45 
Ga. 585 ; Starr y. Bennett, 6 Hill (N. Y.) 303 ; Moreland y. Atchison, 19 Tex. 
803; People y. Superyisors, 27 Oal. 655; Dillman y« Nadlehoffer, 119 IlL 567, 
7 N. E. 88; Burk y. Johnson, 146 Fed. 209, 76 0. C. A. 567. But see Under- 
wood y. Brockman, 4 Dana (Ky.) 309, 29 Am. Dec 407; Fitzgerald y. Peck, 
4 Litt (Ky.) 125; Lowndes y. Chlsolm, 2 SilcOord, Eq. (S. G.) 455, 16 Am. 
Dec. 667. False representation by the lessor of property that the lessee will 
haye the right to sell intoxicating liquors therein. Gormely y. Association, 65 
Wis. 350, 13 N. W. 242. See "Confractt;* Dec Dig. {Key-No.) { 94; Cent. 
Dig, §S 420^4S0. 

«» Ante, p. 256. 

s«Toung y. Young, 113 III. 430; Da we y. Morria, 149 Mass. 188, 21 N. E. 
813, 4 L. R. A. 158, 14 Am. St Rep. 404; Geddes y. Pennington, 5 Dow. 159; 
Dayis V. Davis, 97 Mich.- 419, 56 N. W. 774 ; Nounnan y. Land Co., 81 Cal. 
1, 22 Pac. 515, 6 L. R. A. 219 ; Winston y. Young, 52 Minn. 1, 53 N. W. 1015 ; 
Palmer v. Bell, 85 Me. 352, 27 Atl. 250 ; Curtiss y. Howell, 89 N. Y. 211. See 
**Contract8,'* Dec. Dig. (Key-No.) § 94; Cent. Dig. H 420-4S0. 

S7 McAIeer y. Horsey, 85 Md. 439; Powers y. Fowler, 157 Mas& 818, 82 N. 
E. 166 ; Hoist y. Stewart 161 Mass. 516, 87 N. E. 755, 42 Am. St Rep. 442: 
Post, p. 288. See '^Contracts," Deo. Dig. (Key-No.) ^ 94: Cent. Dig. U 4^0- 
4^0. 



282 KBALITT OF CONSENT (Ch. T 

authority. A party to a contract may not have it set aside because 
of the fraud of a third person, not the agent of the other party, nor 
acting in collusion with him.'* 

Right to Rely on Statements 

In order that a person may be entitled to rescind or maintain an 
action for deceit, the representations must have been of such a 
character, and must have been made under such circumstances,^ 
that he had a right to rely on them. Representations, for instance, 
amounting merely to* commendatory expressions, or exaggerated 
statements as to value, or prospects, or the like, as where a seller 
puffs up the value and quality of his goods, or a man, to induce an- 
other to contract with him, holds out flattering prospects of gain, 
are not regarded as fraudulent.'* 

Simplex commendatio non obligat As we have seen, the buyer 
of property is not justified in relying on the seller's representation 
as to its value.** Some of the courts hold, however, that a state- 
ment by the seller of property that he gave so much for it is a rep- 
resentation of fact upon which the buyer may rely, and that, if it is 
knowingly false, it amounts to fraud.** Other courts hold that 
such a statement is merely a commendatory expression, on which 
the buyer must not rely.** But, even where the statement would 
ordinarily be regarded as a mere commendatory expression •• or ex- 

>• Cagon y. Cason, 116 Tenn. 173, 83 S. W. S9. See **Contracti,*' t)eo. Dig. 
(Key-No.) | 94; Cent. Dig. §§ 420-430. 

so GORDON y. PARMELEE, 2 Allen (Mass.) 212, Throckmorton Cas. Ck>n- 
tracts, 189; Deming y. Darling, 148 Mass. 504, 20 N. E. 107, 2 L. R. A. 743; 
Hughes y. Manufacturing Co., 84 Md. 318 ; Kimball y. Bangs, 144 Mass. 321, 
11 N. E. 113 ; Lockwood y. Fltts, 90 Ala. 150, 7 South. 467 ; Southern Develop- 
ment Co. y. SUva, 125 U. S. 247. 8 Sup. Ct 881, 31 L. Ed. 678; DiUman y. 
Nadlehoffer, 119 IlL 567,7 N. E. 88; Jacksop y. Collins, 39 Mich. 557; Bums 
y. Mahannah, 89 Kan. 87, 17 Pac. 319; Patten y. Glatz (C. C.) 87 Fed. 283; 
Macklem y. Fales, 130 Mich. 66, 89 N. W. 581 (representations as to future 
possibilities). See the cases dted In notes 66, 12, supra. Bee **0<mtracts,*' 
Dec. Dig. (Key-No.) 1 94; Cent. Dig. \% 420-4S0. ' 

»• Ante. p. 279. 

«i Sandford y. Handy. 23 Wend. (N. Y.) 260; Pendergast y. Reed, 29 Md. 
898, 96 Am. Dec. 539; Salm y. Israel, 74 Iowa, 314. 37 N. W. 887 ; Weldner y. 
Phillips, 39 Hun (N. Y.) 1; lyes y. Carter. 24 Ck)nn. 392; Strickland y. Gray- 
bill. 97 Va. 602. 84 S. E. 475. Bee '*Sales;* Deo. Dig. (Key-No.) | 58; Cent. 
Dig. n 65-^5. 

ss Tuck y. Downing. 76 111. 71; Medbury y. Watson, 6 Mete. (Mass.) 246, 39 
Am. Dec. 720 ; O)oper y. Loyerlng, 106 Masa 77 ; Hemmer y. Ck)oper, 8 Allen 
(Mass.) 334; Bishop y. Small. 63 Me. 12; Holbrook y. Connor. 60 Me. 578. 11 
Am. Rep. 212 ; Sowers y. Parker, 59 Kan. 12, 51 Pac 8Sa See, also, Ck)le y. 
Smith, 26 Colo. 506. 58 Paa 1086. Bee **Bal€9,** Dec. Dig. (Key-No.) { S8; Cent. 
Dig. §S 65-^5. 

■s Teachout y. Van Hoesen. 76 Iowa. 113. 40 N. W. 96. 1 K R. A. 664. 14 



§ 189) fbaud" 283 

pression of opinion/* the circumstances may be such as to justify 
the other party in relying on it, as, for instance, where the parties 
do not meet on equal terms by reason of the possession of special 
knowledge by the party making the statement, or there is a relation 
of con6dence between them. In sfuch a case the statement may be 
fraudulent 

Same — Credulity and Negligence of Party Defrauded 

It would seem upon principle that a person cannot avoid the ef- 
fect of his fraudulent misrepresentation on the ground of the cred- 
ulity of the injured party or of his negligence in failing to ascertain 
the facts, and many cases so hold.*' Thus it is very generally held 
that a man may act upon a representation of fact, although means 
of obtaining knowledge are at hand and open to him.'* "Every 

Am. St Rep. 206; Hank t. Brownell, 120 HI 161, 11 N. E. 416; Jackson t. 
CoUlna, 39 Mich. 657; Paetz t. Stoppleman, 75 Wis. 510, 44 N. W. 834; Chrys- 
ler T. Canaday, 90 N. T. 272, 43 Am. Rep. 166; Stoney Greek Woolen Co. t. 
SmaUey, 111 Mich. 821, 69 N. W. 722 ; Horton v. Lee, 106 Wis. 439, 82 N. W. 
360. See "Sales;* Deo. Dig. (Key-No.) i S8; Cent. Dig. H 65^5. 

«« Hedln t. Institute, 62 Minn. 146, 64 N. W. 158, 35 K R. A. 417, 54 Am. 
St Rep. 628; Hicks v. Stevens, 121 IlL 186^ 11 N. E. 241; Robbins T. Barton, 
50 Kan. 120, 31 Pac. 686 ; VUett ▼. Moler, 82, Minn. 12, 84 N. W. 452. See 
*' Sales,'' Dec. Dig. (Key-No.) i S8; Cent. Dig. {{ 65-^5. 

•s Redgrare v. Hurd, 20 Ch. Div. 1; Jackson ▼. Collins, 89 Mich. 557; Ken- 
daU T. Wilson, 41 Vt 567 ; Chamberlin t. Fuller, 59 Vt 247, 9 Att. 832 ; Lin- 
ington T. Strong, 107 111. 295 ; Cottrill v. Krum, 100 Mo. 397, 13 S. W. 753, 18 
Am. St Rep. 549 ; Warder, Bushnell ft Glessner Co. ▼. Whiti^ 77 Wi& 430, 46 
N. W. 540; Sutton y. Morgan, 158 Pa. 204, 27 Att. 894, 38 Am. St Rep. 841; 
McGibbons t. WUder, 78 Iowa, 531, 43 N. W. 520; Erlckson ▼. Fisher, 51 
Minn. 800, 53 N. W. 638 ; BlacknaU t. Rowland, 108 N. C. 554, 13 S. E. 191 ; 
Fargo Gas ft Coke Co. Y. Electric Co., 4 N. D. 219, 59 N. W. 1066, 87 L. R. A. 
593; Speed v. HoUingsworth, 54 Kan. 436, 38 Pac 496; Wilson y. Carpenter's 
Adm'r, 91 Va. 183, 21 S. E. 243, 50 Am. St Rep. 824 ; Strand v. Griffith, 97 
Fed. 854, 88 C. C A. 444 ; Leonard v. Southern Power Co., 155 N. G. 10, 70 
S. B. 1061; Central Ry. Co. of Venezuela y. Kisch, L. R. 2 H. L. 99, 120; 
Crompton y. Beedle, 83 Vt 287, 75 AtL 331, 30 L. R. A. (K S.) 748, Ann. Cas. 
1912A, 399 (where it Is said, per Haselton, J. : '*Any different doctrine, car- 
ried to its logical conclusion, would facilitate transacttons in gold bricks, salted 
mines, bogus diamonds as real, £ac similes as originals, and would permit a 
variety of things destructive of commercial integrity*') « See *'ContracU,** Deo. 
Dig. (Key-No.) % H; Cent. Dig. {{ 420-430. 

••Gammill v. Johnson, 47 Ark. 335, 1 S. W. 610; Redding v. Wright, 49 
Minn. 322, 51 N. W. 1056; Hanscom v. Drullard, 79 Cal. 234, 21 Pac 730; 
Clark v. Ralls (Iowa) 24 N. W. 507; Ledbetter v. Davis, 121 Ind. 119, 22 N. E. 
744 ; Rohrof v. Schulte, 154 Ind. 183, 55 N. E. 427 ; Carpenter v. Wright 52 
Kan. 221, 34 Pac. 798 ; Wheeler v. Baars, 33 Fla. 696, 15 South. 584 ; Lovejoy 
V. Isbell, 73 Conn. 868, 47 AtL 682. Negligence is, of course, no defense, in the 
case of negotiable paper, against Innocent purchasers. Ante, p. 247. See 
''ContractBr Dec, Dig. (Key-No.) i 94; Cent. Dig. {{ 4^0-4SO; *'Fraud,*' Dec 
Dig. (Key-No.) {{ 22, 23; Cent. Dig. M 19-23. 



284 REALITX OF CONSENT (Ch. 7 

contracting party has an absolute right to rely on the express state^ 
ment of an existing fact, the truth of which is known to the oppo- 
site party and unknown to him, as the basis of a mutual engage- 
ment, and he is under no obligation to investigate and verify state- 
ments, to the truth of which the other party to the contract has 
deliberately pledged his faith/' '^ On the other hand, by many 
courts it is laid down in broad terms that if the means of knowledge 
are at hand and equally available to both parties, and the subject 
of the contract is open to the inspection of both, the party to whom 
the representation is made will not be heard to say that he has been 
deceived thereby, if he has not availed himself of inch means of 
knowledge.** This conflict of authority is illustrated by the oppo- 
site' decisions which have been reached in cases involving the lia- 
bility of a person who has been fraudulently induced to execute an . 
instrument upon misrepresentation of the other party as to its char- 
acter or terms. Doubtless a person who fails to read an instru- 
ment before signing it is wanting in ordinary prudence, but it has 
been held by many courts that he is not precluded thereby from 
asserting the invalidity of the contract as against the party who 

»T Mead v. Bunn, 82 N. Y. 275. But see Long v. Warren, 68 N. T. 426; 
Schumaker ▼. Mather, 183 N. Y. 500, 30 N. E. 755, 757. See "ContraoU,'* Dec. 
Dig. (Key-No.) { H; CerU. Dig. U 420-4S0. 

•s Slaughter's Adm*r y. Gerson, 13 WaU. 879, 20 L. Ed. 627; Salem Indla- 
Rubber Co. ▼. Adams, 23 Pick. (Mass.) 266, 265; Poland v. Brownell, 131 
Mass. 138, 41 Am. Rep. 215; Brady ▼. Finn, 162 Mass. 260, 38 N. E. 506; Palm- 
er V. Bell, 85 Me. 352, 27 Atl. 250, 261 ; Schumaker t. Mather, 133 N. Y. 590, 
30 N. E. 755, 757 ; Washington Cent Imp. Co. t. Newlands, 11 Wash. 212^ 39 
Pac. 366 ; South Milwaukee Boulevard Heights Co. ▼. Harte, 95 Wis. 592, 70 
N. W. 821. See, also, Hingston ▼. L. P. ft J. A. Smith Co., 114 l^ed. 204, 52 
C. C. A. 20a 

"The requirement, as it has been worked out, does not call for more than 
reasonable diligence (Hoist y. Stewart, 161 Mass. 516, 522, 87 N. E. 755, 42 
Am. St Rep. 442; Brown t. Leach, 107 Mas& 364, 368; Nowlan ▼. Cain, 3 
Allen [Mass.] 261, 264) ; and distance or other blight circumstances have been 
held sufficient to warrant leaving the question to the Jury (Hoist v. Stewart, 
161 Mass. 516, 522, 523, 37 N. E. 755, 42 Am. St Rep. 442). See Bums t. Lane, 
138 Mass. 350, 355, 356 ; Whiteside ▼. Brawley, 152 Mass. 133, 24 N. E. 1088. 
The matter may have been confused ai little by not distinguishing between 
sellers' talk as to the value and the like, where the rule is absolute in or- 
dinary cases that the buyer must look out for himself, and representation of 
facts concerning which even sellers may be held liable for fraud, and as to 
which the buyers may be warranted in relying wholly on the seller's word. 
The notion that the buyer must look out for himself sometimes has been 
pressed a little too strongly into the latter class of cases." Per Holmes, J., 
in Whiting V. Price, 172 Mass, 240, 51 N. E. 1084, 70 Am. St Rep. 262. See 
"Contracts;* Dec. Dig. (Key-No.) { 94; Cent. Dig. {§ 420-450; ''Fraud;' Dec. 
Dig. (Key-No.) {{ 22, 23; Cent. Dig. {{ 19-2S. 



§ 139) FBAUD 286 

has thus procured the execution by fraud.** By other courts it has 
been held that the party so signing is precluded by his negligence 
from asserting the invalidity of the contract*** 

Knowledge of Falsity — Recklessness 

A representation is fraudulent if it is made with knowledge of 
its falsity or without .belief in its truth. The mere absence of be- 
lief is enough, and hence, if a man makes a misrepresentation in 
reckless disregard whether it is true or not, the representatfon is 
fraudulent, for he can have no belief in the truth of what he as- 
serts.*^ And if a man falsely asserts a fact as true of his own 
knowledge when he has no knowledge, it is none the less fraudu- 
lent because he believes it to be true. Probably it is the prevail- 
ing rule in this cquntry that an unqualified statement of a material 
fact susceptible of actual knowledge is to be taken as a represen- 
tation as of one's own knowledge, and that such a representation if 
false is fraudulent, notwithstanding belief in its truth.** In Eng- 

«• Alfred Shilmpton ft Sons v. PhUbrick, » Minn. 369, 65 N. W. 651 ; Mc- 
Ginn ▼. Tobey, 02 Mich. 262, 28 N. W. 818» 4 Am. 8t Rep. 848; Burroughs 
T. Guano Co., 81 Ala. 255, 1 SoutlL 212 ; Smith t. Smith, 134 N. Y. 02, 81 N. B. 
258, 30 Am. St Rep. 017; Kingman r. Reinemer, 100 HL 206, 40 N. B. 780; 
Alexander y, Brogley, 08 N. J. Law, 307, 43 AtL 888; Woodbridge t. De Witt 
51 Neb. 98, 70 N. W. 500 ; McBride v. Publishing Ck>., 102 Ga. 422, 30 8. E. 009 ; 
Shook T. Puritan Mfg. Co., 75 Kan. 801, 89 Pac. 053, 8 L. R. A. (N. 8.) 1043 ; 
Birdsall y. Coon, 157 Mo. App. 439, 139 S. W. 243. See, also, Louisrllle ft N. 
R. Co. y. Cooper (Ky.) 50 S. W. 144; Story y. Gammell, 08 Neb. 709, 94 N. W. 
982. See "^ContraeU," Dee. Dig. (Key-No.) | 9Ji; Cent. Dig. H 4^M50. 

40 Taylor y. Fleckensteln (a C.) 30 Fed. 99; KeUer y. Orr, 100 Ind. 400» 
7 N. B. 195; Wallace y. Railway Co., 07 Iowa, 547, 25 N. W. 772; Dowagiac 
Mfg. Co. y. Schioeder, 106 Wi& 100, 84 N. W. 14 ; KimmeU y. Skelly, ISO Cal. 
555, 02 Pac. 1007 ; Binford y. Bruso, 22 Ind. App. 512, 54 N. B. 140. Bee ''Con- 
trade,** Dee. Dig. {Key-No,) i $4; Cent Dig. {§ 420-480. 

«i Per Lord Cairns, in Reese Riyer Min. Co. y. Smitli, Li R. 4 H. L. 79 ; 
STIMSON y. HELPS, 9 Colo. 33, 10 Pac 290, Throckmorton Cas. Contracts, 
103 ; Fisher y. MeUen, 103 Mass. 503 ; Cole y. Cassidy, 138 Mass. 437, 52 Am. 
Rep. 284; Stone y. Denny, 4 Mete. (Mass.) 151; Humphrey y. Menlam, 82 
Minn. 197, 20 N. W. 138 ; Bennett y. Judson, 21 N. Y. 238 ; Marsh y. Falker, 
40 N. Y. 502; Allen y. Hart 72 111. 104; Case y. Ayers, 06 IlL 142; Stone y. 
CoyeU, 29 Mich. 359 ; Bristol y. Braidwood, 28 Mich. 191 ; Walsh y. Morse, 80 
Mo. 508; Cotzhausen y. Simon, 47 Wis. 103, 1 N. W. 473; Indianapolis, P. ft 
C. R. Co. y. Tyng, 03 N. Y. 053 ; Cabot y. Christie, 42 Vt 121, 1 Am. Rep. 813 ; 
Ruff y. Jarrett 94 lU. 475 ; Cooper y. Schlesinger, 111 U. 8. 148, 4 Sup. Ct 
800, 28 L. Ed. 882; Bower y. Fenn, 90 Pa. 359, 35 Am. Rep. 002; Leayitt y. 
Sizer, 35 Neb. 80, 52 N. W. 832 ; Krause y . Busacker, 105 Wis. 350, 81 N. W. 
400. See "^Cowtracte;* Deo. Dig. {Key-No.) S 94; Cent. Dig. {{ 4^0-^480; 
**Fraud,** Dec Dig. {Key-No.) i 19; Cent. Dig. it S-5. 

42 Litchfield y. Hutchinson, 117 Mass. 197 ; Chatham Furnace Co. y. Mof- 
fatt, 147 Mass. 408, 18 N. E. 108» 9 Am. St Rep. 727 (Cf. Goodwin y. Trust 
Co., 162 Mass. 189, 25 N. B. 100) ; Kirkpatrick y. Reeyes, 121 Ind. 280, 22 
N. B. 139; BuUitt y. Farrar, 42 Minn. 8, 48 N. W. 508, L. R. A. 149, 18 Am. 



286 BBALITT OF CONSENT (Ql. 7 

land, on the other hand, and in some states it is held that a state- 
ment made in the honest belief that it is true is not fraudulent, not- 
withstanding absence of reasonable grounds for believing it to be 
true.** The absence of such grounds can only go to show that the 
belief was not entertained,** 

The fact that the party making the representation professed to 
rely on the representations of others, and grave the source of his 
information, is immaterial, if he knew, or had reason to believe, 
that they were untrue.** 

Intention 

The representation must have been made with the intention that 
it should be acted upon by the injured party.** Another statement 
of this rule is that the representation must be made as part of the 
same transaction.*^ 

St RePn 485; Montreal Lnmber Ck>. ▼. HibUls, 80 WU. 640, 60 N. W. 607; 
dabot T. Christie, 42 Vt 121, 1 Am. Rep. 813 ; Knappen t. Freeman, 47 Minn. 
491, 60 N. W. 633; State v. Cass, 62 N. J. Law, 77, 18 Ati. 972; Hamlin ▼. 
AbeU, 120 Mo. 188. 26 S. W. 510 ; Rothschild v. Mack, 116 N. T. 1, 21 N. E. 728 ; 
Hadcock v. Osmer, 163 N. T. 604, 47 N. E. 923 ; Braley T. Powers, 92 Me. 203. 
42 Atl. 302; Walters t. Eaves, 106 Ga. 684, 82 S. B. 609; Simon y. Rubber Shoe 
Co., 105 Fed. 673, 44 C. C. A. 612, 62 L. B. A. 746 ; New London Water Com'rs 
V. Robbins, 82 Conn. 623, 74 Att. 938; ToUej T. Poteet, 62 W. Va. 231, 67 S. 
E. 811 ; Grim t. Byre, 82 Grat (Va.) 298. The frand in such a case "consists 
in stating that the party knows the thing to exist when he does not know it 
to exist ; and, If he does not know it to exist, he must ordinarily be deemed 
to know that he does not Forgetfulness of its existence after a former 
knowledge, or a mere belief of its existence, will not warrant or excuse a 
statement of actual knowledge." Chatham Furnace Co. t. Moffatt, supra. And 
see Alvarez v. Brannan, 7 CaL 603, 68 Am. Dec. 274. Bee **Contraoti," Dec. 
Dig. (Key-No.) i H; Cent. Dig. {{ itO-^O; '^Fraud^ Deo. Dig. (Key-No.) { 
IS; Cent. Dig. H S-^. 

«t'Derry t. Peek, 14 App. Ca& 337; Merwin t. Arbuckle, 81 111 501; Cox t. 
Highley, 100 Pa. 249; Lamberton v. Dunham, 165 Pa. 129, 80 Atl. 716; \i^il- 
cox T. University, 82 Iowa, 867; Lord y. Goddard, 13 How. 198, 14 L. Bd. 
Ill ; Pettlgrew v. Chellls, 41 N. H. 95 ; Scroggin v. Wood, 87 Iowa, 497, 64 
N. W. 437; Sylvester v. Henrlch, 93 Iowa, 489, 61 N. W. 942; Morton v. Scull, 
23 Ark. 289; Farmers' Stock Breeding Ass'n v. Scott, 68 Kan. 534, 86 Pac. 
978 Bee ^'Contracts,** Dec Dig. (Key-No.) ^ 9i; Cent. Dig. H V^O-J^SO. 

«« Anson, Cont (8th Ed.) 172. 

«B Hansoom v. DruUard, 79 CaL 234, 21 Pac. 736. Bee ^^ContraetB," Dee. Dig. 
(Key-No.) i H; Cent. Dig. %% 420-4S0; *'Fraud,'' Deo. Dig. (Key-No.) { 22; 
Cent. Dig. §i 19-t3. 

«• Buschman t. Codd, 62 Md. 202; Hxmiphrey ▼. Merriam, 32 Minn. 197, 20 
N. W. 138 ; Bach v. Tuck, 67 Hun, 588, 10 N. Y. Supp. 884 ; Carter v. Har- 
den, 78 Me. 628, 7 Atl. 392 ; Thorp v. Smith, 18 Wash. 277, 61 Pac. 881. Bee 
^'Contracts,** Deo. Dig. (Key-No.) 8 94; Cent. Dig. H 420-^0; ''Fraud,"* Deo. 
Dig. (Key-No.) { 4; Cent Dig. | 2. 

«r Pollock, Cont (3d Ed.) 545; Bamett v. Bamett, 83 Va. 604, 2 S. B. 738. 
Bee ** Contractor Deo. Dig. (Key-No.) { 94; Cent. Dig. H 42(^-490. 



r(.r€f(,f 



I 

S 189) FBAUD 287 

The representation need not, indeed, have been made to the in- 
jured party himself. If a person, desiring to enter into a con- 
tract with another, should make a representation to a third person 
with the intention that it should reach the ears of such other per- 
son, and be acted upon by him, in entering into the contract, thi3 
would constitute a fraudulent misrepresentation equally as if it had 
been made to the other party.** Where a gun was sold to a man 
for the use of himself and sons, the seller falsely representing that 
it had been made by a certain maker, and was a good, safe, and 
secure gun, it was held that a son of the buyer who was injured 
by the gun's exploding could sue the seller for deceit. In that case 
it was argued that the defendant could not be held liable to the 
plaintiff for a representation not made to him ; but the court held 
that inasmuch as the gun was sold to the father to be used by the 
plaintiff, and there was a false representation to effect the sale, and 
"as there was fraud, and damage the result of that fraud, not from 
an act remote and consequential, but one contemplated by the de- 
fendant at the time as one of its results," the defendant was lia- 
ble.** So, also, where a merchant makes a false statement as to 
his financial responsibility to a mercantile agency for the purpose 
of procuring credit, and customers of the agency, in reliance there- 
on, give him credit, and are defrauded, they may maintain an ac- 
tion of deceit against him, or avoid their contract with him on the 
ground of fraud.** 

The representation, however, must have been made with the in- 
tention that it should be acted upon by the injured party in the 
manner that occasions the injury.*^ Thus, where the directors of 
a company made false statements in the prospectus of the company, 
which would have made them liable to the original ^Uotters of 

4« Lengridge ▼. Levy, 2 Mees. ft W. 519; Snow t. Judson, 8S Barb. (N. T.) 
210; Benton v. Pratt, 2 Wend. (N. Y.) 885, 20 Am. Dec. 623; Cbubbnck t. 
Cleyeland, 37 Minn. 466, 86 N. W. 862, 5 Am. St Rep. 864 ; Waterbnry t. An- 
drews, 67 MKb. 281« 84 K. W. 575; Hubbard ▼. Weaie, 79 Iowa, 678, 44 N. 
W. 915. Bee ''Contradi,^ Deo. Dig. {Key-No.) { 9i; OenU Dig, {{ ktO-W. 

«• Langridge ▼. LeTj, 2 Meea. ft W. 519. Bee '^Balee;' Dec Dig, (Ketf-No,) i 
40; Cent. Dig. H 79-^. 

••Baton, Cole ft Burnbam Co. t. Ayery, 83 N. Y. 81, 88 Am. Bep. 889; 
Mooney y. Davis, 75 Mich. 188, 42 N. W. 802, 18 Am. St Rep. 425 ; Furry t. 
O'Connor, 1 Ind. App. 573, 28 N. E. 108 ; Hinchman t. Weeks, 85 Mich. 535, 
48 N. W. 790; GalnesTllle Nat Bank y. Bramberger, 77 Tex. 48^ 18 S. W. 959, 
19 Am. St Rep. 788; P. Cox Shoe Ca y. Adams, 106 Iowa, 402, 75 N. W. 
316; STEVENS v. LUDLUM, 46 Minn. 160, 48 N. W. 771. 13 L. R. A. 270, 24 
Am. St Rep. 210, Throckmorton Caa. Contracts^ 192^ Bee ^Balee^^ Deo. Dig. 
(KeyVo.) 81 4^. 47; Cent. Dig. 88 95, 96, 

Bi Barry y. Crosky, 2 Johns, ft H. 1. Bee '^Fraud,** Deo. Dig. (Key-Vo,) 88 
tl, n: Cent. Dig. 88 9-tS. 



288 RBALITY OF CONSENT (Ch. T 

shares, they were held not to be liable to persons who subsequent* 
\y purchased shares which came into the market, on the ground 
that their intention to deceive could, not be supposed to extend be* 
yond the original applicants for shares.*' The directors in such a 
case would be liable to the original applicants, for shares, relying 
on the prospectus.*' 

Same — Dishonesty of Motive 

If a person makes a representation which was fraudulent as has 
been above explained, it is immaterial that he may not have been 
actuated by any dishonest motive. If a man chooses'to make such 
assertions, hoping or even believing that all will turn out well, he 
cannot escape the results of his fraud by showing the excellence 
of his motives.** Thus, where a person accepted a bill of exchange 
drawn on another person, and falsely represented that he had au- 
thority from that other to do so, he was held liable in an action of 
deceit brought against him by an indorsee, the acceptance having 
been repudiated by the drawee and the bill dishonored; and the 
fact that the defendant honestly believed that the acceptance would 
be sanctioned by the drawee, and the bill paid, was held immate- 
rial." 

Representation must Deceive 

A false representation, to constitute fraud, must actually deceive; 
that is, it must be relied on by the other party, and must induce him 
to act to his prejudice. If it is not believed, or the party disregards 

»2 Peck T. Gumey, Li. R. 6 H. T^ 377. 410. And see Nash v. Trast Co., iry9 
Mass. 437, 84 N. E. 025; Davidson ▼. Nichols, 11 Allen (Mass.) 514. It baa 
been held that it could not be said, as a matter of law, that false representa- 
tions concerning the value of certain stock, by which a person was induced to 
buy, may not hare continued in his mind, and induced him to buy mors 
of the stock a year later. Reeve y. Dennett, 145 Mass. 23. 11 N. E. 038. 
See ^^Corporations,'' Dec. Dig, (Key-No,) I 80; Cent. Dig. SS 24^-^64. 

Bt Reese River Mln. Co. v. Smith, 4 H. Ia Cms. G4 ; Vrecland T. Stone Co., 
29 N. J. Eq. 188. See *' Corporation," Dec, Dig, {Kcy-yo.) I 80; Cent, Dig. 

SS «44-«ff4. 

B4 PolhlU V. Walter. 3 Barn. & Adol. 114. A buyer of goods cannot avoid 
the effect of knowingly false statements as to his financial condition by show- 
ing that he intended and expected to pay for them. Judd v. Weber, 55 Conn. 
267, 11 Atl. 40. See. also, ante, p. 274. Although the maker of the representa- 
tion believes it to be true, If he discovers that it is false before it is acted 
on, and does not disclose the fact, he is guilty of fraud. Loewer v. Harris, 
67 Fed. 368, 6 C. C. A. 394; Guilford School Tp. v. Roberts, 28 Ind. App. 355. 
62 N. B. 711. Bee ^'Contracts;* Dec. Dig, (Key-No.) { 94; Cent. Dig, ff 420- 
4S0; ''Frauds Deo, Dig, (Key-No.) S IS; Cent. Dig. {{ SS. 

" PolhlU V. Walter, 8 Bam, & AdoL 114. Bee *'Fraud," Dee. Dig. (Key- 
No,) i IS; Cent, Dig. U SS- 



5 139) FRAUD 289 

it» and makes inquiries for himself, there is no fraud.** In a lead- 
ing case on this subject it appeared that the defendant had bought 
a cannon from the plaintiff, having a defect in it which rendered 
it worthless, and the plaintiff had endeavored to conceal the defect 
by inserting a metal plug in the weak spot The defendant never 
inspected the cannon. He accepted it, and, in using it, it burst. 
It was held that the attempted fraud, having had no operation upon 
the mind of the defendant, did not exonerate him from paying for 
the gun. "If," said the court, "the plug which it was said was put 
in to conceal the defect had never been there, his position would 
have been the same; for, as he did not examine the gun, or form 
any opinion as to whether it was sound, its condition did not af- 
fect him." ■' If the representation was one calculated to induce 
the other party to make the contract, the presumption is that he 
was influenced by it ; and, in order to take away his right to relief 
on the ground of fraud, it must be shown that he did not rely on 
it" 

The representation need not have been the sole inducement to 
enter into the contract. If it was a material inducement — that is, if 
it so contributed as an inducement that without it the contract 
would not have been made — ^it is sufficient** 

■• Arkwrlgbt v. Newbold. 17 CIl'DIv. 824; Ming v. Woolfolk, 116 U. S. 599, 

6 Sup. Gt 489, 29 L. Ed. 740; Humphrey y. Merrlam, 82 Minn. 197, 20 N. W. 
188; Crehore v. Grehore, 97 Masa 830, 98 Am. Dec 98; Bunge ▼. Brown, 28 
Keb. 817, 87 N. W. 600 ; Brackett t. Grlswold, 112 N. Y. 45i 20 N. B. 876 ; 
Graig y. Hamilton, 118 Ind. 665, 21 N. E. 816 ; Priest y. White, 89 Mo. 609, 1 
S. W. 861; Buschman y. Godd, 62 Md. 202; Farrar y. GhurchUl, 136 U. S. 
616, 10 Sup. Gt 771, 34 K Ed. 246; Hubbard y. Weare, 79 Iowa, 678, ^ N. 
W. 916; Gobb y. Wright, 43 Minn. 83, 44 N. W. 662; Wimer y. Smith, 22 
Or. 469, 80 Pae. 416; Pennybacker y. Laidley, 83 W. Va. 624, 11 S. B. 89; 
Darby y. Eroell, 92 Ala. 607, 8 South. 384 ; Pratt y. Burhans, 84 Mich. 487, 
47 N. W. 1064, 22 Am. St Rep. 703 ; Fowler y. McGann, 86 Wis. 427, 66 N. 
W. 1085; Black y. Black, 110 N. G. 398, 14 S. B. 971; Dady'y. Gondit, 163 
IlL 611, 45 N. B. 224; Brady y. Byana^ 78 Fed. 668, 24 G. a A. 236; Wagner 
y. Insurance Go., 90 Fed. 896, 88 G. GL A. 121. Bee **OontracU," Dec. Dig. 
(Key-No,) 8 94; Cent. Dig, %% 420-4S0. 

ST Horsfall y. Thomas, 1 HurL & G. 90, 99. Bee ** Contract 8,"* Dec. Dig. 
(Key-No.) S H; Cent. Dig. M 420-4S0; ^'Bales,'* Dee. Dig. (Key-No.) % S8; 
Cent. Dig. i§ €5-85. 

»• Redgraye y. Hurd, 20 Gh. Diy. App. 21 ; Hicks y. Steyens, 121 lU. 186, 
11 N. E. 241; Garrison y. Electrical Works, 69 N. J. Eq. 440, 46 Aa 612; 
Dashlel y. Harshman, 118 Iowa, 283, 86 N. W. 88; Grim y. Byrd, 82 Grat 
(Va.) 298. Bee "Sate*," Dec. Dig. (Key-No.) ^ S8; Cent. Dig. %% 65-85. 

»• JAMES y. HODSDEN, 47 Vt 127, Throckmorton Ga& Gontracts, 196, in 
which it la said, per Redfleld, J.: "It is oiough that the party was decelyed 
and cheated and the defendant's falsehood and fraudulent practices con- 
tributed to that end ;** Peek y. Derry, 87 Gh. Diy. 641, K R. 14 App. Ga& 
887; Safford y. Grout, 120 Mass. 20; Burr y. WUlson, 22 Minn. 206; Lebb.i7 

Glabk Gont.(3d En.>—19 



290 REALITY OF CONSENT (Ch. 7 

Injury must Result 

It is essential, in order to sustain an action of deceit, or to give a 
party the right to avoid a contract on the ground of fraud, that he 
shall have been prejudiced or injured by the fraud.** Where, for 
instance, a person was induced to exchange his property for shares 
of stock by false representations of the other party, but the stock 
was worth what he gave for it, so that he suffered no injury, it was 
held that he could not maintain an action fof deceit.*^ And, in a 
case in which the seller of property had falsely represented that 
there was no mortgage thereon, it was held that the purchaser could 
not avoid the sale, where the seller had the mortgage released as 
soon as his attention was called to it.*' 




/*c^- 



SAME— EFFECT— REMEDIES 

140. Fraud renders a contract, not void, but merely voidable at the 

option of the party injured. Therefore, 

(a) He may affirm the contract, and sue for damages for the de* 

ceit, or, if sued on the contract, set up the fraud in reduc- 
tion of the demand. 

(b) He may rescind the contract, and 

(1) Sue for damages for the deceit; 

(2) Sue to recover what he has parted with; 

(3) Resist an action at law on the contract ; 

(4) Resist a suit in equity for specific performance, or 

(5) Sue in equity to have the contract avoided judicially. 

141. There are the following limitations to a part/s right to rescind 

a contract for fraud : ' 
(a) He cannot rescind after affirming it by accepting its benefits, 
or by suing or otherwise acting upon it after discovery of 
the fraud. 

▼. AfMXM, 26 S. G. 275» 2 S. E. 387; Saunders t. McCllntock, 46 Mo. App. 216; 
Strong V. Strong. 102 N. Y. 69, 6 N. B. 799; Ruff v. Jarrett, 94 IlL 475; 
MoUne-Mllbum Ca v. Franklin, 87 Minn. 137, 33 N. W. 323. 'See '*Ooniracta" 
Deo. Dig. (JTey-^o.) § H; Cent. Dig. ff k20-i$0. 

•• Schubart v. Coke Co., 41 111. App. 181; Marriner y. Dennlson, 78 Cal.* ^ ^ ^ 
202^ 20 Pac. 386; Lorenzen v. Investment Co., 44 Neb. 99, 62 N. W. 231; ^^ — 

Bomar v. Rosser, 131 Ala. 216, 81 South. 430. But see Northrop t. Hill, 57 
N. Y. 851. 16 Am. Rep. 601. See "Contracts," Deo, Dig. (Key-No.) i 94; Cent. 
Dig, SS 4^0-4^0. 

•I Alden t. Wright, 47 Minn. 225, 49 N. W. 767, and cases there cited. See 
*'Fraudr Deo. Dig. {Key-No.) S 85; Cent. Dig. I 24. 

•» Johnson v. Seymour, 79 Mich. 15<), 44 N. W. 344. And see Beard t. 
BlUey, 3 Colo. App. 479, 34 Pac 271. Cf. Stevenson v. Marble {O. (X) 84 Fed. 
23. See *'SaZc#," Dec Dig. (Key-No.) f 58; Cent Dig. H ^5-85. 



3§ 140-141) FBAUD 291 

(b) Delay in rescinding after discovery of the fraud, or after it 

should have been discovered, may amount to an affirmance 
at law, and may bar relief in equity on the ground of laches. 

(c) The consideration must be returned as a condition precedent 

to the right to rescind ; and, as a rule, there can be no re- 
scission if the subject-matter of the contract has been so 
dealt with that the parties cannot be placed in statu quo. 

EXCEPTIONS — (1) This rule does not apply where the 
consideration has been destroyed, or taken from the 
injmred party's control, without his fault. 

(2) Where it is of no value whatever, 
. (3) Provided the consideration is returned, the fraudulent 
party need not be placed in as good a position as he 
before occupied, if, by reason of his own act, it is im- 
possi))le to do so. 

(4) If, by natural causes, or reasonable use, the value of the 
consideration has diminished, it may be returned in 
its depreciated condition. 

(d) The right to rescind may be defeated by a third person's 

having acquired an interest under the contract for value, 
and without notice of the fraud. 

Fraud does not render the contract void, but renders it only void- 
able at the option of the party defrauded.** In other words, it is 
valid until rescinded'. It is for the party defrauded to elect whether 
he will be bound.'* He therefore has several remedies on discover- 
ing the fraud : 

First. He may affirm the contract, and bring an action for de- 
ceit to recover such damages as the fraud has occasioned him, or 
set up such damages by way of recoupment or counterclaim, if sued 
upon the contract by the other party.'* For instance, the defraud- 

••HOWLBY T. BIGBLOW, 12 Pick. (Mass.) 307, 2S Am. Dea 607, Throdk- 
morton, Cas. Ck>iitracts, 196; Balrd ▼. Mayor, 96 N. Y. 667; Smith t. Horn- 
back, 4 Litt (Ky.) 232, 14 Am. Dea 122; Foreman t. Blgelow, 4 Cliff. 541, 
Fed. Gas. No. 4,934; Cobb t. Hatfield, 46 N. Y. 533; Wilson v. kondley, 96 
Va. 96, 30 S. B. 492, 70 Am. St Rep. 837. Bee "O^ntraoU,'' Dec Dig. {Key- 
Vo.) i 9^; Cent. Dig. i 447. 

•« Rawlins y. Wlckbam, 3 De Oez ft J. 322; Clough t. Railway Ck)., L. R. 
7 Exch. 26; Tiffany, Sales, 119. Bee **ContracU,** Dee. Dig. (Key-No.) i 98; 
Cent. Dig. f U7. 

•B Union Gent Life Ins. Go. t. Scbidler, 130 Ind. 214, 29 N. E. 1071, 15 
Lu R. A. 89; Peck ▼. Brewer, 48 IlL 54; Haven ▼. Neal, 43 Minn. 315, 45 
N. W. 612 ; Pryor ▼. Foster, 180 N. t. Ill, 29 N. B. 123 ; Nauman v. Oberle, 
90 Mo. 666, 8 S. W. 380 ; Barr v. Kimball, 43 Neb. 766, 62 N. W. 196. But 
some cases hold that if, while the contract is still wholly or largely executory. 



\ 



n 



29% RBAUTT OF CONSBNT (Ch. T 

cd buyer, on' discovering the fraud, may keep the goods, and bring 
an action for damages ; ** or, if he has not paid for them, he may set 
up the fraud when sued by the seller for the price.*' 
Second. He may rescind the contract, and (1) sue, in an actioa 
(j ' of deceit, for any damages he may have sustained by reason of the 
/• fraud ; •■ or (2) if he has paid money under the contract, he may re- 
**-* cover it back,** and if he has delivered goods or property he may 
^ ' maintain an action of replevin or trover ; '• or (3) he may resist 
an action at law brought against him on the contract ; '^ or (4) 
he may resist a suit in equity by the other party for specific per- 
formance; ^* or (5) he may himself sue in equity to have the con- 
tract judicially canceled and set aside.'* 

the defrauded party learns of the fraud, and nevertheless eonthroes to earrj 
oat the ocmtract, exacting performance, and receiving benefits, he cannot 
maintain an action for the deceit Kingman ft Ck). v. Stoddard, 85 Fed. 740, 
29 a C. A. 413 ; Simon v. Rubber Shoe Co., 105 Fed. 573, 44 a G. A. 012, 53 
L. R. A. 745. Bee **Wraud,*' Dec, Diff, (Key-Vo.) %% SI, St; Cent. Dig. i| £7, £8. 

•• Honldsworth v. City of Glasgow Bank, 5 App. Cas. 823. fifee '*Balei,*' 
Deo. Dig. (Keg-No.) i m; Cent. Dig. H 1146-1155. 

•T Applegarth ▼. Robertson, 85 Md. 4d3, 4 Aa 888. 8ee ^^SiOee/' Deo. Dig. 
(KeV'No^ i S48; Cent. Dig. H 979^86. 

••Warden v. Fosdick, 13 Johns. (N. T.) 825, 7 Am. Dec. 883; Bums v. 
Dockray, 158 Mass. 135, 80 N. B. 551; Peck t. Brewet, 48 IlL 54. See 
"Fraud:' Dec. Dig. (Keg-Vo.) 8t 81, SB; Cent. Dig. If n, 28. 

••Clarke v. Dickson, BL Bl. ft BL 148; Coolidge v. Brigham, 1 Mete. 
(Mass.) 547; Jordan ft Davis v. Annex Corp., 109 Va. 825, 84 S. B. 1050, 17 
Ann. Cas. 287. Bee -Bdlee,*" Deo. Dig. (Key-No.) ^ m; Cent. Dig. i| 1146- 
1165. 

r^Thnrston v. Blandiard, 22 Pick. (Mass.) 18^ 33 Am. Dea 700; Ferguson 
V. Carrlngton, 9 Bam. ft C. 59; Lee t. Biimham, 82 Wis. 209, 52 N. W. 255; 
Moody y. Blake, 117 Mass. 23, 19 Am. Rep. 394 ; Cary v. Hotalllng, 1 HUl (N. 
Y.) 311, 37 Am. Dea 823 ; Benesch t. Weil, 89 Md. 278, 14 Att. 868 ; Barker 
▼. Dlnsmore, 72 Pa. 427, 13 Am. Rep. 697. Bee ** Bales,'' Deo. Dig. (Keg-No.) 
Si 816-^18; Cent. Dig. U 800^98. 

7iClough y. Railway O., K R. 7 Ezch. 90t 88; Olston y. Oregon Water 
Power ft Ry. Co., 52 Or. 843, 96 Pac. 1095, 97 Pac. 538, 20 L. R. A. (N. S.) 915w 
See "Salea:* Deo. Dig. (Keg-No.) | 847: Cent Dig. {S 962-972. 

rs Ratliff) y. Yandlkes, 89 Va. 307, 15 S. B. 864 ; Friend y. Lamb, 152 Pa. 
529, 25 Atl. 577, 34 Am. St Rep. 672; McShane y. Hazlehnrst, 50 Md. 107; 
Chute y. Qulncy, 156 MaA. 189, 30 N. E. 550; Brown y. Pitcaim, 148 Pa. 
387, 24 Atl. 52^ 33 Am. St Rep. 834. See "Specific Performance,** Deo. Dig. 
(Key-No.) S 5S/ Cent. Dig. if 750-171%. 

T» Castle y. Kemp, 124 111. 307, 16 N. B. 255; Downing y. Wherrln, 19 N. 
H. 9, 49 Am. Dec. 139 ; Bnrrows y. Wene (N. J.) 26 AtL 890 ; Williams y. 
Kerr, 152 Pa. 560, 25 Atl. 618; Jackson y. Hodges, 24 Md. 468; Tretheway 
V. Hulett, 52 Minn. 448, 54 N. W. 486. . flfee "Cancellation of Inetrumenta,** 
Deo. Dig. (Key-No.) S 4; Cent. Dig. | i. 




^ ,(.Sf'/>'^^^ 



§§ 140-141) FR4UD ^ i^,^^^^^ 

Limitations to Right to Rescind \J ^ ^ 

" As a rule, the defrauded party must elect to rescind within a rea- 
sonable time after discovering the fraud/* of, what amounts to the 
same thing, after he could have discovered it by the use of due dili- 
gence/^ It has been said that mere lapse of time, in the absence of 
statutory regulation, will not bar his right to rescind, though it 
would be evidence tending to show an intention to affirm/* A de- 
lay in rescinding which is unreasonable in view of the particular 
circumstances, however, will generally be regarded, even at law, as 
an election to affirm,^^ and will bar relief in equity on the ground 
of laches/* 

Any acts which unequivocally treat the contract as subsisting will 
constitute an affirmance. If, after discovering the fraud, the party 
injured acts on the contract by accepting some benefit under it, or 
otherwise, he affirms it, and cannot afterwards rescind, for after an 
affirmance the election is determined/* Bringing an action on the 

T4 Johnson t. McLane, 7 Blackf. (Ind.) 601, 48 Am. Dec. 102; Schlffer v. 
DIetz, 83 N. Y. 800 ; Strong v. Strong, 102 N. Y. 09, 5 N. B. 799 ; Bailey ▼. 
Fox, 78 Gal. 880, 20 Pac. 868 ; Young y. Anitze, 86 A}a. 116, 5 South. 253 ; . 
Pence v. Langdon, 99 U. S. 578, 25 K Ed. 420; Taylor ▼. Short, 107 Mo. 884, 
17 S. W. 970; Rugan ▼. Sabln, 10 U. S. App. 519, 8 C. a A. 578, 58 Fed. 415; 
Wilbur T. Flood, 16 Mich. 40, 93 Am. Dee. 203; Gonlan y. Roemer, 52 N. J. 
Law, 58, 18 Atl. 858; Foley ▼. Grow, 87 Md. 62; Fleming V. Hanley, 21 R. 
I. 141, 42 AtL 520. Delay alone^ without dlscoyery of the fraud, will not 
bar the right to rescind. Smith's Adm'r t. Smith, 80 Vt 189; Brown t. 
Norman, 65 fiiflss. 869, 4 South. 298, 7 Am. St Rep. 663; Bowman y. Patrick 
(a G.) 86 Fed. 188; SheyUn y. Shevlin, 96 Minn. 898^ 105 N. W. 257. Bw 
•'Contracts," Dec. Diff. (Key-No.) i t70; Cent. Dig. H 11B9, ItOO. 

TsRedgraye y. Hurd, 20 Gh. Diy. 1; Georgia Pac. R. Ga y. Brooks, 66 
Miss. 583, 6 South. 467; Bostwick y. Insurance Go., 116 Wis. 892, 89 N. W. 
538y 92 N. W. 246, 67 K R. A. 705. Bee '*ContraoU," Dec Dig. (Key-No.) { 
270; Cent Dig. {{ 11S9, 1200. 

76 Anson, Gont (8th Ed.) 177; Glough y. Railroad Go., L. B. 7 Bzch. 35; 
Wicks y. Smith, 21 Kan. 412, 80 Am. Rep. 483. Bee **Oontracta.'* Dee. Dig. 
(Key-No.) { 270; Vent. Dig. {{ X189, 1200. 

TT Masson y. Boyet, 1 Denio (N. Y.) 69, 43 Am. Dec. 651; Perry y. Pear^ 
son, 185 TU. 218. 25 N. E. 636: 'GarroTI y. People. 18 in. App. 206: note T4. 
supra. Bee ''OontraeU,'* Deo. Dig. (Key-No.) f 270; Cent Dig. f§ 1189, 1200. 

T« Gox y. Montgomery, 86 lU. 396; Perry y. Pearson, 135 111. 218, 25 N. a 
636; Whittaker y. Improyement Go., 34 W. Va. 2[17, 12 S. B. 507; Barnard 
y. Iron Go., 85 Tenn. 139, 2 S. W. 21 ; Burkle y. Levy, 70 CM. 250, 11 Pac. 643^ 
Wilkinscm v. Sherman, 45 N. J. Eq. 413, 18 Atl. 228; Goles y. Vanneman, 51 
N. J. Eq. 823, 18 Ati. 468, 30 Atl. 422. Bee ''Contracts,** Dee. Dig. (Key-Ne.) { 
270; Cent Dig. {{ 1189, 1270. 

r* Grymes y. Sanders, 93 U. S. 55, 23 U Bd. 798; Dennis y. Jones, 44 N. J. 
Bqi. 513, 14 Atl. 913, 6 Am. St Rep. 899; Pence y. Langdon, 99 U. a 67S, 25 
Lu Ed. 420 ; Lockwood y. Fltts, 90 Ala. 150, 7 South. 467 ; Grooks y. Nlppolt, 
44 Minn. 239, 46 N. W. 849; Ebersteln y. Willets, 134 IlL 101, 24 N. B. 967; 
Troup y. Appleman, 52 Md. 456; Wyeth y. Walzl, 43 Md. 426; Oobb y. Hat- 



294 BBALITT OF CONSENT (Ch. 7 

contract, or otherwise seeking to enforce it, after knowledge of the 
fraud, is an affirmance.** It is otherwise if an action is brought, or" 
the contract otherwise acted upon, in ignorance of the fraud.** As 
already stated, an affirmance of the contract is no bar to an action 
to recover damages for the deceit.** 

Return of Consideration — Placing in Statu Quo 

The contract must be rescinded in toto ; it cannot be rescinded 
in part and affirmed in part.** As a rule, therefore, it is a condition 
precedent to the right to, rescind a contract on the ground of fraud 
that the party seeking to rescind shall return, or offer to return, 
what he has received under the contract;** and generally, if the 
subject-matter has been so dealt with, even before discovery of the 
fraud, that the parties cannot be reinstated in their former position, 

field, 46 N. Y. 533 ; BeU ▼. Keepers, 39 Kan. 105, 17 Pac. 785 ; Bach ▼. Tach, 
128 N. Y. 53. 26 N. B. 1019; Kennedy r. Bender (Tex. Olv. App.) 140 S. W. 
491. See **Contract8,'* Deo. Dig, (Key-No.) f 97; Cent Dig. |{ J^^Z-W. 

•oBach T. Tuch, supra; Conrow v. Little, 115 N. Y. 387, 22 N. B. 346, 5 
li. R. A. 693; Goodall y. Stewart, 65 Miss. 157, 8 SoutlL 257; Mansfield y. 
Wilson (Ark.) 13 S. W. 598; Bedler y. Reaame, 95 Mich. 518, 55 N. W. 306; 
Wheeler v. Dunn, 13 Colo. 428, 22 Pac 827 ; Stevens y. Pierce, 151 Mass. 207, 
23 N. B. 1006. See *Vontract8r Deo. Dig. (Key-No.) | 97; Cent. Dig. §§ -M»- 

•X Lee y. Bumham, 82 Wis. 209, 52 N. W. 255 ; Bqnitable C5o-op. Foundry 
CJo. y. Hersee, 103 N. Y. 25, 9 N. B. 487 ; Hoyt Mfg. CJo. y. Turner, 84 Ala. 523, 
4 South. 658; Baker y. Maxwell, 99 Ala. 558, 14 South. 468. See **Contraot8," 
Deo. Dig. (Key-No.) { 97; Cent. Dig. {| i42-W. 

92 Ante, p. 291 ; Gilchrist y. Manning, 54 Mich. 210, 19 N. W. 959; Mattock 
y. Beppy, 47 Ark. 148, 14 S. W. 546; Hlnchman y. Weeks, 85 Mich. 535, 48 
N. W. 790 ; ChUds y. Merrill, 63 Vt 463» 22 Ati. 626, 14 L. R. A. 264 ; Union 
Oent Life Ins. Co. y. Schidler, 130 Ind. 214, 29 N. B. 1071, 15 L. R. A. 89; 
Wabash Valley Protective Union y. James, 8 Ind. App. 449, 35 N. B. 919; 
Teachout y. Van Hoesen, 76 Iowa, 113, 40 N. W. 96, 1 L. R. A. 604, l4 Am. 
St Rep. 206; Kennedy y. Bender (Tex. Civ. App.) 140 S. W. 491. Bee "Con- 
tracts:' Deo. Dig. (Key-No.) ^ 97; Cent. Dig. §i 442-W. 

»8 Brill v. Rack (Ky.) 23 S. W. 511; MerrlU v. Wilson, 66 Mich. 232, 33 N. 
W. 716 ; Barrie v. Earle, 143 Mass. 1, 8 N. B. 639, 58 Am. Rep. 126 ; BeU v. 
Keepers, 39 Kan. 105, 17 Pac. 785 ; ante, p. 212. And sbe the cases cited in the 
following notes. See ^'Contracts,** Deo. Dig. {Key-No.) { 266; Cent, Dig. | 
1186. 

s« Brown y. Norman, 65 Miss. 369, 4 South. 293, 7 Am. St Rep. 663; Esta- 
brook y. Swett 116 Mass. 303; Obb y. Hatfield, 46 N. Y. 633; Thompson v. 
Peck, 115 Ind. 512, 18 N. B. 16, 1 L. R. A. 201 ; Babcock y. Case, 61 Pa. 427, 
100 Am. Dec 654 ; Young v. Amtze, 86 Ala. 116, 5 South. 253 ; Doughten v. 
Association, 41 N. J. Bq. 556, 7 Atl. 479; Cookingham y. Dusa, 41 Kan. 229, 
21 Pac. 95; (Darlton y. Hulett, 49 Minn. 308, 51 N. W. 1053; Balue v. Taylor, 
136 Ind. 368, 36 N. B. 269; Freeman v. Kieffer, 101 CaL 254, 35 Paa 767; 
Moore v. Association, 165 Masa 517, 43 N. B. 298 ; Friend Bros. Clothing Co. 
y. Hulbert 98 Wis. 183, 73 N. W. 784; Breyfogle y. Walsh, 80 Fed. 172, 25 
a O. A. 357. See ^'Contracts,'* Dee. Dig. (Key-No.) | 260; Cent. Dig. { 1186. 



§§ 140-141) FRAUD 295 

the court will not allow a rescission, but will leave the matter to be 
adjusted by an action for damages by the party injured, or defense 
or counterclaim in an action by the other party.** 

The defrauded party need not return what he has received, how- 
ever, if it has been destroyed, or taken from his control, without 
fault on his part,** or if it is absolutely worthless.*^ Nor need he 
place the other party in the position which he before occupied, if, by 
reason of the latter's act, it is impossible to do so. All that can be 
required is that he return what he has himself received.** Mere 
depreciation in value of the thing received before discovery of the 
fraud will not defeat rescission ; ** and if in the meantime lie has in- 
curred expenses for repairs, he may, on rescission and return, re- 
cover the cost.** 

Sanle — As Against Third Persons 

. It follows from the principle that the contract is voidable, and 
not void, that, when innocent third persons have for value acquired 
rights under the contract, their rights are indefeasible. The rule is 
also said to be an application of the principle of convenience, that, 

ss Curtiss T. Howell, 89 N. Y. 211; Neal t. Reynolds, 88 Kan. 432, 16 Pac. 
785; Rigdon ▼. Walcdtt, 141 lU. 649, 31 N. E. 158; Stanton t. Hughes, 97 
N. a 318, 1 S. B. 852 ; Handforth y. Jackson, 150 Mass. 149, 22 N. B. 834. 
Bee "Contracts,'' Deo. Dig. (Key-No.) f 266; Cent. Dig. { 1186. 

•• Neblett r. Hac£ar4and, 92 U. S. 101, 23 L. Ed. 471 ; Flynn ▼. Allen, 57 
Pa. 482; Hammond y. Pennock, 61 N. Y. 145; Hennlnger y. Heald, 51 N. J. 
Eq. 74, 26 Aa 449 ; Groff y. Hansel, 33 Md. 161. See ''Contracts,** Dec Dig. 
{Key-No.) | 266; Cent. Dig. | 1186. 

•7 Fitz y. Bynnm, 55 Cal. 459; Wicks y. Smith, 21 Kan. 412, 80 Am. Rep. 
433; Babcock y. Caise, 61 Pa. 427, 100 Am. Dea 654. If the things recelyed 
are capable of serylng any purpose of advantage by their possession or con- 
trol, or If their loss would be a disadvantage In any way, they must be re- 
turned. *Thls rule Is held with great strictness In actions at law, as In the 
case of the casks that contained worthless lime (Conner y. Henderson, 15 Mas& 
319, 8 Am. Dec. 108), and the sacK that covered the rejected bale of cotton 
(Morse y. Brackett, 98 Mass. 205; Id., 104 Mass. 494)." Bassett y. Brown, 
105 Mass. 558. And see Evans v. Gale, 17 N. H. 573, 43 Am. Dec. 614. Bee 
•^Contracts,** Dec. Dig. (Key-No.) | 266; Cent. Dig. ^ 1186. 

•• Masson y. Bovet, 1 Denlo (N. Y.) 69, 43 Am. Dec 651 ; Hammond y. 
Pennock, 61 N. Y. 145; Guckenhelmer ▼. Angevlne, 81 N. Y. 394; Gates v. 
Raymond, 106 Wis. 657, 82 N. W. 530. And see John V. Farwell Co. y. Hilton 
(O. C.) 84 Fed. 293, 39 L. R. A. 579. See ''Contracts,** Deo. Dig. (Key-No.) 
I 266; Cent. Dig. { 1186. 

St Veazle v. WUUams, 8 How. 134, 158, 12 L. Ed. 1018; Neblett y. Macfar- 
land, 92 U. S. 101, 104, 23 L. Ed. 471 ; Baker v. Lever, 67 N. Y. 304, 23 Am. 
Rep. 117; Gatllng v. Newell, 9 Ind. 574; Goodrich v. Lathrop, 94 CaL 56, 29 
Pac. 329, 28 Am. St Rep. 91. See "Contracts,** Deo. Dig. (Key-No.) | 266; 
Cent. Dig. i 1186. 

90 Farrls v. Ware^ 60 Me. 482. Bee "Contracts,** Dec Dig. (Key-No.) | 266; 
Cent. Dig. | 1186. .. 



296 REALITY or CONSENT (Ch. 7 

when one of two innocent persons must suffer from the fraud of a 
third, the loss should fall on the one who enabled the third party to 
commit the fraud.*^ Hence, a sale of land or goods cannot be re- 
scinded so as to revest the property in the vendor if the vendee has 
in the meantime sold them to a bona fide purchaser.** The seller's 
remedy is by an action for damages.** The purchase must be for 
valiie, and henee the protection does not extend to attaching credi- 
tors,** to an assignee in bankruptcy,** or to a person takihg the 
property in payment of an existing indebtedness.** 

A sale, however, is to be distinguished from mere delivery of pos- 
session induced by fraud ; for in the latter case the person obtaining 
possession acquires no property in the goods, and can pass none to a 
third person, however innocent. Thus, where a person obtains 
goods by fraudulently impersonating a third person,*^ or by pre- 
tending to be the agent of a third person,** to whom the owner sup- 

•xPoUock, Cont (3d Ed.) 556; Tiffany, Sales, 122. 

•« ROWLEY T. BIGELOW, 12 Pick. (Mass.) 307, 23 Am. Dec 607, Throck- 
morton Gas. (Contracts, 196. Bee **Vendor and Purchaser,** Dec Dig. {Key- 
Vo,) i M9; Cent. Dig. U 58S-600, 

•» Babcock t. Lawson, 4 Q. B. Dlv. 304 ; ROWLEY y. BIGELOW, 12 Pick. 
(Mass.) 307, 23 Am. Dea 607, Throckmorton CJas. Gontracts, 196; Hoffman 
T. Noble, 6 Mete (Mass.) 68, 89 Am. Dec. 711; Neff ▼. Landis, 110 Pa. 204, 1 
Atl. 177; Le Grand v. Bank, 81 Ala. 123, 1 South. 460, 60 Am. Rep. 140; Moore 
▼. Moore, 112 Ind. 149, 13 N. E. 673, 2 Am. St. Rep. 170; Jones t. Ghristian, 
86 Va. 1017, 11 S. E. 984; Armstrong T. Lewis, 38 111. App. 164; First Nat 
Bank ▼. Carriage Co., 70 Miss. 587, 12 South. 598; Scheuer t. Goetter, 102 
Ala. 313, 14 South. 774; Hall T. Hinks, 21 Md. 406; Singer Mfg. Ck>. y. Sam- 
mons, 49 Wis. 316, 5 N. W. 788; Cochran t. Ste^rart, 21 Minn. 435. See 
**Vendor and PurchaBer;* Dec. Dig. {Key-Vo.) % tS9; Cent. Dig. {{ 588^00, 

•« Buffington t. Gerrish, 15 Mass. 158, 8 Am. Dec. 97 ; Thompson t. Rose, 
16 Conn. Tit ^ Am. Dec. 121 ; Jordan y. Parker, 56 Me. 557 ; Oswego 'Starch 
Factory y. Lendrum, 57 Iowa, 573, 10 N. W. 900, 42 Am. Rep. 53; Henderson 
y. Gibbs, 39 Kan. 679, 684, 18 Pac. 926. See ^'Salea,** Deo. Dig. (Key-Tfo.) | 
««; Cent. Dig. §§ 609^11; **Vendor and Purchaser,*' Dec. Dig. {Key-No.) | 
216; Cent. Dig. S W; *' Execution,** Cent. Dig. H 5S, 106-109, US, lU. 

•s Donaldson y. Farwell, 93 U. S. 631, 23 U Ed. 993; Bussing y. Rice, 2 
Gush. (Mass.) 48; Singer y. Schilling, 74 Wis. 369, 43 N. W. 101; Benesch 
y. Weil, 69 Md. 274, 14 Atl. 666. See **8ales,** Deo. Dig. {Key-No.) i 2S0; Cent. 
Dig. i 650. 

•• Barnard y. (^mpbell, 58 N. Y. 73, 17 Am. Rep. 208 ; Steyens y. Brennan, 
79 N. Y. 258; Sleeper y. Davis, 64 N. H. 59, 6 AtL 201, 10 Am. St Rep. 377; 
Poor y. Woodburn, 25 Vt 235 ; McGraw v. Solomon, 83 Mich. 442, 47 N. W. 
^5. Contra, Shufeldt y. Pease, 16 Wis. 659; Butters y. Haughwout, 42 IIU 
18, 89 Am. Dec. 401. See "Sales,** Dec. Dig. {Key-No.) § 2S0; Cent. Dig. { 650. 

tT GUNDY y. LINDSAY, 3 App. Gas. 459, 47 L. J. Q. B. 481, 38 I* T. Rep. 
N. S. 573, 26 Wkly. Rep. 406. Throckmorton Gas. Contracts, 169; Loeffel y. 
Pohlman, 47 Mo. App. 574. Cf . EXlmunds y. Transportation Co., 185 Mass. 283, 
Bee "Sales,*' Deo. Dig. {Key-No.) § 234; Cent. Dig. SS 645-680. 

•s Cases cited, ante, p. 250, note 21.* 



n-u^^i^r'f^^^ 



|§ 142-144) DURESS 297 

poses he is selling, the person thus obtaining the goods acquires no 
title, and a bona fide purchaser from him stands in no better posi- 
tion. In such case there is no contract at all, as the seller never con- 
sented to sell to the person to whom he delivered the goods. 

As a rule, if a negotiable instrument is procured by fraud, the 
party intending to sign it as such, so that there is no mistake as to 
the character of the instrument, it cannot be avoided on the ground 
of the fraud after it has passed into the hands of a bona fide pur- 
chaser for value ; •• but, as we have seen, it is otherwise where, by 
fraud or circumvention, a person is induced to sign a negotiable in- 
strument, when he does not intend to sign it, l{ut thinks he is sign- 
ing something else, provided, of course, he is not guilty of such 
negligence as will estop him from setting up his mistake.^ 




DURESS 

142. Duress is actual or threatened violence or Imprisonment, by 

reason of which a person is forced to enter into a contract. 
To affect the contract, however^ 

(a) It must have been against or of the contracting party, or his 

or her wife, or husband, parent, child, mr other near rela- 
tive. 

(b) It must have been inflicted or threatened by the othei: party 

to the contract, or by one acting with his knowledge or on 
his behalf. 

(c) It must have induced the party to enter into the contract 

143. OF GOODS. By the weight of modem authority, the unlaw- 

ful detention of another's goods under oppressive circimi- 
stances, or their threatened destruction, may constitute 
duress. 

144. EFFECT. A contract entered into by a person under duress 

is voidable at his option. 




The ground upon which a contract entered into under duress c 
be avoided is because there is no real consent. The apparent con- 
sent is unreal because of the imprisonment or force, or of the fear 

••Olark ▼. Thayer, 105 Masa 216, 7 Am. Rep. 511; Smith ▼. Lirlngston, 
111 Mass. 842; Southwlck v. Bank, 84 N. Y. 420; Grldley ▼. Bane, 57 la 529; 
Onoibee r. Howe, 54 Vt. 182, 41 Am. Rep. 841. fifes ''BiXU and JioU^,** Dm. 
Dig. {K9y-No.) i SIS; Cent. Dig. If 966^970. 

1 Set ante, p. 247^ 



298 REALITY OF GONSBNT (Ch. 7 

J 

caused by the threats. "Actual violence," it has been said, "is not 
necessary to constitute duress, ♦ ♦ ♦ because consent is the 
very essence of a contract ; and, if there be compulsion, there is no 
actual consent; and moral compulsion, such as that produced by 
threats to take life, or to inflict great bodily harm, as well as that 
produced by imprisonment, is everywhere regarded as sufficient, 
in law, to desfroy free agency, without which there can be no con- 
tract, because in that state of the case there is no consent. 'Duress,' 
i n^its more exten d ed sen s e^.mcan^ that degrccj aLconstrainf or da n- 
ger, either^ctuailv jt7flicted or threatene d.aml impend i ng, whjchj s 
suffid enti in sey ^ritj^nr in apprehension, to overcojUC the mind aq d ^^^^Cc^^ 
will of a person of orTlinary firmness/* * i^^f (^ 

¥he statement of what constitutes duress, made in this and many ^ / 

other cases,* requires that the violence or threats shall have been ji^^ > 
sufficient to overcome a mind of ' 'ordinary firmnes^ ." or the mind of 
a person of "ordinary coura ge.*' By the great weight of modern au- C C 
thority, however, both m mis country and in England, this test has 
been rejected. The rule now generally prevailing is that violence or 
threats employed for the purpose of overcoming the mind, and ac- 
tually having that effect, constitute duress, although the violence or 
threats employed would not be sufficient to overcome the mind of 
a person of ordinary firmness.* 

* Pierce y. Brown, 7 WaU. 205, 19 L. Ed. 134. See, also, Baker t. Morton, 
12 WaU. 150, 20 Lw Ed. 262; Foshay y. Ferguson, 5 Hill (N. Y.) 154; Eadie 
y. summon, 26 N. Y. 12, 82 Am. Dec. 395; French y. Shoemaker, 14 WaU. 
314, 20 L. Ed. 852; U. S. y. Huckabee, 16 WalL 432, 21 Ix Ed. 457; Mmer y. 
Mmer, 68 Pa. 486; GuUleaume y. Bowe, 94 N. Y. 268, 46 Am. Rep. 141; Har- 
mon y. Harmon, 61 Me. 227, 14 Am. Rep. 556; Fisher y. Shattuck, 17 Pick. 
(Mass.) 252; Gotwalt y. Neal, 25 Md. 434; Bane y. Detrlck, 52 IlL 19; Alex- 
ander y. Pierce, 10 N. H. 494; McClalr y. Wilson, 18 Colo. 82, 81 Pac. 502; 
Horton y. Bloedorn, 87 Neb. 666, 56 N. W. 321 ; Batavlan Bank y. North, 114 
WlB. 637, 90 N. W. 1016. A threat by a husband to separate from his wife 
and not support her has been held such duress as to ayoid a deed by her to 
him induced thereby. Tapley y. Tapley, 10 Minn. 448 (Gil. 360), 88 Am. Dec. 
76. An angry command by husband to wife, unaccompanied by threats of 
personal yiolence, held not duress. Gabbey y. Forgeus, 38 Kan. 62, 15 Pac. 
866. Merely to speak roughly to a woman, without threats of personal yio- 
lence, is not duress. Dausch y. Crane, 109 Mo. 323, 19 S. W. 61. Mere yexa- 
tion and annoyance is not duress. Brower y. Callender, 105 IlL 88. fifes 
""OontractB,'* Deo, Dig. (Key-No,) { 95; Cent. Dig. |§ JiSl-UO. 

» United States y. Huckabee, 16 Wall. 414, 21 Lw Ed. 457 ; Hines y. Board, 
93 Ind. 266; Morse y. Woodworth, 155 Mass. 233, 27 N. B. 1010, 29 N. E. 
525; Flanigan y. Gity of Minneapolis, 36 Minn. 406, 31 N. W. 359; Horton y. 
Bloedorn, 37 Neb. 666, 66 N. W. 321 ; Kennedy y. Roberts, 105 Iowa, 521, 75 
N. W. 863. Bee ^'Contracts/* Dec. Dig. (Key-No.) { 95; Cent. Dig. |{ 431-UO, 

4 GALUSHA T. SHERMAN, 105 Wis. 263, 81 N. W. 495, 47 L. R. A. 417, 



/7J e«-f Vf 



{§ 142-144) DURESS 299 

It is almost needless to add that the contract must have been 
made because of the imprisonment, or of fear of the threatened in- 
jury or imprisonment; otherwise, there is no duress.* 

Duress per Minos 

Duress per minas, as defined at common law, is where a person 
is forced to enter into a contract (a) from fear of loss of life; 
(b) from fear of loss of limb ; (c) from fear of mayhem ; (d) from 
fear of imprisonment, — ^and there is no doubt but that threats of 
such injuries will constitute duressl* The older English authori- 
ties restrict the operation of the rule within the limits mentioned. 
They deny that contracts procured by menace of a mere battery 
to the person can be avoided on that ground; and the reason 
assigned for this rule is that such threats are not of a nature to 
overcome the mind and will of a firm and prudent man.^ There 
are cases to the same effect in this country, and some of the text 
writers have adopted the old rule.* 

Throckmorton Caa. Contracts, 200; Cribba t. Sowle, 87 Mich. 840, 40 N. W. 
587, 24 Am. St Rep. 166 ; Baldwin t. Hutchinson, 8 Ind. App. 464, 85 N. Bl 
711 ; Parmentler r. Pater, 18 Or. 121, 9 Pac 59 ; International, Harvester Go. 
y. VoborU,,187 Fed. 973, 110 O. O. A. 811; McCarthy t. Tanska, 84 Conn. 877, 
80 Atl. 84; Wllliamson-Halsell, Frazier Go: ▼. Ackerman, 77 Kan. 502, 94 
Pac. 807, 20 L. B. A. (N. 8.) 484 ; Brown v. Worthlngton, 162 Ma App. 508, 
142 S. W. 1082; Nebraska Mut Bond Ass'n t. Klee, 70 Neb. 883, 97 N. W. 476. 
Bee '*C(miract9/' Deo. Dig. (Key-No.) | 95; Cent Dig. H 4Sl''i40. 

i Feller y. Green, 26 Mich. 70; Flanlgan y. City of Mlnneapolia, 86 Minn. 
406, 81 N. W. 859; Schwartz y. Schwartz, 29 IlL App. 516; Inhabitants ot 
Whltefleld y. Longfellow, 13 Me. 146; Alexander y. Pierce, 10 N. H. 494; 
Bosley y. Shanner, 26 Ark. 280; Stone y. Weiller, 57 Hun, 588» 10 N. Y. 
Supp. 828; Post y. Bank, 138 lU. 559, 28 N. B. 97& See ^'Contracts,** Deo. 
Dig. (Key-No.) { 95; Cent, Dig. || 4S1'U0. 

• 8 Bac Abr. "Duress," 252 ; Baker y. Morton, 12 WalL 150, 20 L. Ed. 262 ; 
and cases hereafter cited. Threat of personal ylolence. Pierce y. Brown, 7 
Wall. 205, 19 L. £d. 134 ; Baker y. Morton, supra ; Magoon y. Reber, 76 Wis. 
892, 45 N. W. 112; Anderson y. Anderson, 74 Hun, 56, 26 N. T. Supp. 492. 
Threat of criminal prosecution and imprisonment Foshay y. Ferguson, 5 
Hill (N. Y.) 154; 2 Co. Inst, 483; Co. litt 253b; Eadle y. Slimmon, 26 N. 
Y. 9, 82 Am. Dec. 895; Inhabitants of Whltefleld y. LongfeUow, 13 Me. 146; 
Bane y. Detrick, 52 IIL 19; James y. Roberts, 18 Ohio, 548; Baldwin y. 
Hutchison, 8 Ind. App. 454, 35 N. B. 711 ; Maricle y. Brooks, 51 Hun, 638, 9 
N. Y. Supp. 210; Morrison y. Faulkner, 80 Tex. 128, 15 S. W. 797; Landa y. 
Chert, 78 Tex. 33, 14 S. W. 297 ; Wlnfleld Nat Bank y. Croco, 46 Kan. 620, 
26 Pac 939. See post, p. 801, and cases cited. A threat to '*make complaint'* 
and send the person threat^ied to prison is not duress, where the threats do 
not specify an olfense for which imprisonment may be had. Kruschke y. 
Stef&n, 83 Wis. 373, 53 N. W. 679. See *'Contract9/* Deo. Dig. (Key-No.) | 
95; Cent. Dig. if iSl-UO. 

T 2 Co. Inst 483; Shep. Touch. 6; post, p. 800. *1 Pars. Cont 39a 



800 RBALITX OF CONSENT (Ch. 7 

By the modem rule, however, threats and fear of battery to the 
person are sufficient to constitute duress, if the mind of the party 
is actually overcome thereby.* 

It is not pecessary that the threats be made directly to the per- 
son to be influenced; it is sufficient if they are made to a third 
person with intent that they be communicated to him, and they 
are actually communicated*** 

Duress of Imprisonment 

Imprisonment is any restraint of a person's liberty, whether i^ 
be in prison or elsewhere. Any unlawful imprisonment, whatever 
may be the ground of illegality, constitutes duress, and avoids a 
contract entered into by the person imprisoned for the purpose 
of riegaining his liberty.** Under the older rule, the imprisonment 
must have been illegal; lawful imprisonment, whatever might be 
the circumstances, was not regarded as duress ; ** and this rule 
has been adhered to in some of the modem cases.** By the over- 
whelming weight of modern authority, however, the rule has been 
so far modified that now even a legal imprisonment will consti- 
tute duress if the process is sued out maliciously and without 
probable cause, or if it is sued out with probable cause, but for 
an unlawful purpose; as,. for instance, where a legal arrest for 
crime is procured for the purpose of coercing payment of a private 
demand, or if the imprisonment, though legal, is made unjustly 
oppressive.** All the courts agree, however, that if the imprison- 

• Pierce v. Brown, 7 Wall. 205, 10 L. Ed. 134 ; Foshay r. Ferguson, 6 Hill 
(N. Y.) 154; Love t. State, 78 Ga. 66, 3 S. E. 808, 6 Am. St Rep. 234. See 
**Contraci9,*' Dee. Dig, {Key-Vo,) % 95; Cent. Diff, K 4S1-U0. 

10 Price t. Bank of Poynette, 144 Wis. 190, 128 N. W. 895. See *'Oon^ 
tracts,** Dee. Dig. {Key-Vo.) % 95; Cent, Dig. {| 4S1-H0. 

11 Osbom V. Bobbins, 36 N. Y. 365 ; Gnllleanme t. Rowe, 94 N. T. 268, 46 
Am. Rep. 141 ; Stepney ▼. Lloyd, Gro. Eliz. 647, Swell, Lead. Gas. 760 ; Fish- 
er y. Shattuck, 17 Pick. (Mass.) 252; Alexander t. Pierce, 10 N. H. 494; 
Whitefleld y. Longfellow, 18 Me. 146; Thompson y. Lockwood, 15 Johns. (N. 
Y.) 256; Bowser v. Lowell, 49 Me. 429; Tllley y. Damon, 11 Gush. (Mass.) 
247. See '*Oowtractsr Dec. Dig. (Key-No.) | 95; Cent. Dig. |{ 491^440. 

n 2 Go. Inst 483 ; Shep. Touch. 6. 

i»Glark v. Tumbull, 47 N. J. Law, 265, 64 Am. Rep. 157; Kelsey y. Hob- 
by, 16 Pet 269, 10 L. Ed. 961 ; Taylor y. Gottrell, 16 111. 93 ; Heaps y. Dun- 
ham, 95 111. 583 ; McGormlck Harvester CJo. v. MUler, 54 Neb. 644, 74 N. W. 
1061. See '^Contracts;* Deo. Dig. (Key-No.) | 95; Cent. Dig. ff iSl-W. 

i« Watklns y. Balrd, 6 Mass. 506, 4 Am. Dec. 170 ; Richardson y. Duncan, 
t N. H. 608; Selber y. Price, 26 Mich. 618; Eadie y. Slimmon, 26 N. Y. 9, 82 
Am. Dec. 395; Schoener y. Lissauer, 107 N. Y. Ill, 13 N. E. 741; Bane y. 
Detrick, 52 IlL 19; Work's Appeal, 69 Pa. 444; Phelps y. Zuschlag, 34 Ter. 
871 ; Holmes y. Hill, 19 Mo. 159 ; Foley y. Greene, 14 R. I. 618» 61 Am. Rep. 



IS 142-144) DURESS 301 

ment is lawful; and there is no abuse of process, there is ho 
duress.** 

The rule that the imprisonment must be unlawful applies equal- 
ly to duress per minas, where the threat is of imprisonment. A 
threat of unlawful arrest and imprisonment is duress,** but, as 
a rule, a threat of lawful imprisonment is not.** A threat, for 
i^istance, by a creditor, to bring a suit against his debtor, and 
procure his arrest therein, is not duress whofc the creditor may 
lawfully so proceed.** It has also been said, without qualification, 
that, if a person has been wronged by the embezzlement or other 
criminal act of another, it is not duress to threaten him with a 
criminal prosecution, and thereby coerce him into giving a note, 
or otherwise settling for the injury.** As we have seen, however, 
a strictly legal imprisonment procured for the purpose of enforcing 
a private demand is an abuse of process, and constitutes duress ; 
and on the same principle it has been held duress to threaten 
imprisonment for such a purpose.** 

419; Town of Sharon t. Gager, 46 Conn. 189; Bentley t. Robson, 117 MiclL 
«91. 76 N. W. 146; Behl v. Schuett, 104 Wis. 76, 80 N. W. 73. Bee '*Owir 
traoU:' Deo. Dig, (Keu-No,) | 9S; Cent. Diff. |i 431-UO. 

XB Sonle ▼. Bouney, 87 Me. 128; Pilchard ▼. Sharp, 61 Mich. 432, 16 N. W. 
798; Felton y. Gregory, 130 Mass. 176; Taylor ▼. Cottrell, 16 IlL 93; Nea- 
ley T. Greenongh, 25 N. H. 325; Smith y. Atwood, 14 Ga. 402; Stouffer v. 
Latshaw, 2 Watts (Pa.) 165, 27 Am. Dec 297; State t. Snch, 53 N. J. Iaw, 
851, 21 AtL 852; Meek ▼. Atkinson, 1 Bailey (S. 0.) 84, 19 Am. Dec 653; 
Stebblns y. Niles, 25 Miss. 267, 849; Mascolo y. Montesanto, 61 Conn. 50, 23 
AtL 714, 29 Am. St Rep. 170 ; Maryin y. Bfaryln, 52 Ark. 425, 12 S. W. 875, 
20 Am. St Rep. 191; Harrison Tp. y. Addison, 176 Ind. 389, 96 N. B. 146. 
And see Medrano y. State, 32 Tex. Cr. R. 214, 22 S. W. 68i 40 Am. St Rep. 
775. See *'OontraoU;' Deo. Dig. (Key-T^o.) % $6; OmU. Dig. || iSl-UO. 

it GALUSHA y. SHERMAN, 106 Wis. 263, 81 N. W. 495» 47 L. R. A. 417, 
Throckmorton Cas. Contracts, 200. And see ante^ pw 299.. Bee **C<mtract9,^* 
Decu Dig. (Key-2fo.) | 95; Cent. Dig. || J^l-UO. 

IT Mullln y. Lef^my, 80^ N. J. Law, 484, 79 Aa 257. Bee *'Centract9,*' Dec. 
Dig. (Key-No.) | 95; Cent. Dig. if Vl-UO. 

!• Dnnha^ y. Grlswold, 100 N. Y. 224, 8 N. B. 76 ; Clark y. TumbuU, 47 
N. J. Law, 265, 54 Am. Rep. 157; Hllbom y. Bucknam, 78 Me. 482, 7 Atl. 
272, 57 Am. Rep. 816. Bee '^Contraott,*' Dee. Dig. (Key-No.) { 95; Cent. 
Dig. 11 431-440. 

i»Bddy y. Herrln, 17 Me. 838, 35 Am. Dec. 261; Hllbom y. Bucknam, 78 
Me. 482, 7 AU. 272, 57 Am. Rep. 816 ; Taylor y. Cottrell, 16 111. 93 ; Sanf ord 
y. Somborger, 26 Neb. 295, 41 N. W. 1102; Thorn y. Plnkham, 84 Me. 103, 24 
AU. 718, 30 Am. St Rep. 335 ; Weber y. Barrett, 125 N. Y. 18, 25 N. B. 1068 ; 
Compton y. Bank, 96 lU. 301, 36 Am. Rep. 147. See '*Contract9,** Dec. Dig. 
(Key-No.) | 96; Cent. Dig. || 491-440. 

s>Sea Morse y. Woodworth, 155 Mass. 283, 27 N. E. 1010, 29 N. B. 525; 

Adams y. Bank, 116 N. Y. 606, 23 N. B. 7, 6 L. R. A. 491, 15 Am. St Rep. 

-447 ; Miller y. Bryden, 84 Mo. App. 602 ; Morrison y. Faulkner, 80 Tex. 128, 

10 S. W. 797 ; Schultz y. CatUn, 78 Wis. 611, 47 N. W. 946 ; Morrill y. Night- 



y&oj a^i' 'V'? 



302 BBALITY or CONSENT (Ch. 7 

Duress of Goods 

Under the stricter rule which' formerly prevailed, a promise was 
not given under duress if made in consideration of the release of 
goods from unlawful destruction or detention, and there is modem 
authority to the same effect.** Most courts, however, have estab- 
lished a more liberal rule, and regard duress of goods under 
oppressive circumstances as sufficient to avoid a contract.** Du- 
ress in this connection must not be confounded with want of 
consideration. If the detention were obviously without right, the 
promise would be void because of want of consideration; if the 
right were doubtful, the promise might be supported by a com- 

s 
Ingale, 03 Cal. 452, 28 Pae. 1068, 27 Am. St Rep. 207; ^Bryant t. Peck, 154 

Mass. 460, 28 N. E. 678 ; LighthaU y. Moore, 2 Colo. App. 554, 81 Pac. 611 ; 

Heaton y. Norton Go. State Bank, 59 Kan. 281, 52 Pac. 87& Be9 **0<nUractM/* 

Deo. Dig. (Key-Not) | 95; Cent. Dig. |{ iSl-UO. 

SI Atlee y. Backhouse, 3 Mees. & W. 633 ; Skeate y. Bea^, 11 AdoL ft £. 
983 ; Hazelrigg y. I>onaldson, 2 Mete. (Ky.) 445. Bee "ContraoUt' Dea Dig. 
{Key-No.) | 95; Cent. Dig. if ^Sl-UO. 

ss Lonergan y. Buford, 148 U. S. 581, 13 Sup. Gt 684, 37 U Ed. 669; U. S. 
y. Huckabee, 16 Wall. 432, 21 L. Ed. 457; Foshay y. Ferguson, 6 HUl (N. Y.) 
154; Sasportas y. Jennings, 1 Bay (S. G.) 470; Harmony y. Bingham, 12 
N. T. 99, 62 Am. Dec. 142; White y. Heylman, 34 Pa. 142; Mots y. Mitchell, 
91 Pa. 114 ; Miller y. Miller, 68 Pa. 486 ; Pemberton y. Williams, 87 lU. 16 ; 
Seholey y. Mumford, 60 N. T. 498; McPherson y. Cox, 86 N. T. 472; Craw- 
ford y. Cato, 22 Ga. 594; Bennett y. Ford, 47 Ind. 264; Oliphant y. Mark- 
ham, 79 Tex. 543, 15 S. W. 569, 23 Am. St Rep. 363 ; McCormick y. Dalton, 
53 Kan. 146, 86 Pac. 1113 ; Fuller y. Roberts, 35 Fla. 110, 17 South. 859. A 
note giyen, or money paid to obtain release of goods from attachment fraud- 
ulently obtained, may, under some circumstances, be ayoided or recoyered 
back. Chandler y. Sanger, 114 Mass. 364, 19 Am. Rep. 367 ; Collins y. West- 
bury, 2 Bay (S. G.) 211, 1 Am. Dec. 643 ; Spaids y. Barrett, 57 111. 289, 11 
Am. Rep. 10; Nelson n Suddarth, 1 Hen. & M. (Va.) 350. But seizure of 
property claimed by A. under attachment against B. is not duress of A. 
Kingsbury y. Sargent, 83 Me. 230, 22 Atl. 105. So, where a note is giyen, or 
money paid, to prevent seizure of property under execution fraudulently ob- 
tained, Thurman y. Burt, 53 111. 129; or under warrant for the collection 
of illegal tax or assessment, Boston A S. Glass Go. y. City of Boston, 4 Meta 
(Mass.) 181; Bruecher v. Village of Port Chester, 101 N. T. 240, 4 N. E. 272; 
Bradford y. City of Chicago, 25 IlL 411. Exactions by carrier before de- 
delivery of properly. Beckwith v. Frisbie, 82 Vt. 559; Tutt y. Ide, 3 Blatchf. 
249, Fed. Gas. No. 14,275b; Harmony y. Bingham, supra. Refusal by car- 
rier to transport freight Little Rock & Ft S. Ry. Go. y. Cravens, 57 Ark. 
112, 20 S. W. 803, 18 L. R. A. 527, 38 Am. St Rep. 230. Refusal by carrier 
to carry stock which has been loaded on cars, unless shipper will sign special 
contract Atchison R. Go. v. Dill, 48 Kan. 210, 29 Pac. 14a Refusal by 
banker to honor check unless fraudulent claim is acceded to, held duress. 
Adams y. Schiffer, 11 Colo. 15, 17 Pac. 21, 7 Am. St Rep. 202. Threat to file 
mechanic's lien. Gates v. Dundon (City Ct N. Y.) 18 N. Y. Supp. 149. Ex- 
actions by customs officer as condition to delivery of property. Maxwell v. 



/oi- ^ >//, 

%% 142-144) DUBBS8 803 

promise. A mere refusal to pay money unless the creditor signs 
a receipt in full is not duress ; ■■ nor is the refusal of a debtor to 
pay a debt, even where the creditor is in straitened circumstances 
and needs the money.'^ So a threat to institute a civil action,'* 
or to levy an attachment or execution,'* is not duress. 

Against Whom 

As a rule a contract entered into in order to relieve a third 
person is not voidable on the ground of duress.'^ It should be 
noted, however, that a simple contract, the consideration for which 
is the discharge of a third person from illegal imprisonment, would 
be void for want of consideration.'* Though the law does not 

Griswold. 10 How. 242, IS L. Ed. 405; Elliott T. Swartwont, 10 Pet 137, 9 
' Lk Ed. 373. Threats to prevent clearance of yessel, with power to carry out, 
is duress ot ship's master. Baldwin y. Timber Co., 05 Hun, 625, 20 N. T. 
Suppb 400. And see McPherson y. Ck)x, supra. Bee **Oontraci8,** Deo. Dig. 
{Key-No.) | 95; Cent. Dig. |{ iSl-W. 

St Earle y. Berry, 27 R. I. 221, 61 Aa 671, 1 L. B. A. (N. S.) 867, 8 Ann.- 
Cas. 875. Bee "Contracte," Dee. Dig. {Key-Vo.) { 95; Cent. Dig. U J^UUO. 

«* Hackley v. Headley, 45 Mich. 569, 8 N. W. 611 ; Secor v. Clark, 117 N. Y. 
350, 22 N. E. 754 ; Cable y. Foley, 45 Minn. 421, 47 N. W. 1135 ; Adams y. 
Schiffer, 11 Colo. 15, 17 Pac. 21, 7 Am. St Rep. 202; Doyle y. Church, 133 
N. Y. 372, SI N. B. 221. Bee '^ContracU,*' Deo. Dig. {KeyNO.) | 96; Cent. 
Dig. II j^Sl-^iO. 

*8 McClair t. WUson, 18 Colo. 82, 31 Pac 502; Whittaker y. Improyement 
Co., 34 W. Va. 217, 12 S. E. 507 ; Wilson S. Bi. Co. y. Curry, 126 Ind. 161. 25 
N. B. 896; Atkinson y. Allen, 71 Fed. 58, 17 O. C. A. 670; York r. Hinkle, 
80 Wis. 624, 50 N. W. 895, 27 Am. St Rep. 73; Bestor y. Hickle, 71 Conn. 
181, 41 Aa 656 ; Hart y. Strong, 183 lU. 349, 55 N. B. 629. Bee ^'Contracts,*' 
Deo. Dig. (Key-No.) { 95; Cent. Dig. i| iSl-UO. 

'•Wilcox y. Howland, 28 Pick. (Mass.) 167; Waller y. Cralle, 8 B. Mon. 
<Ky.) 11; Stoyer y. BfitcheU, 46 111. 213. Bee **Oontracie;* Dec. Dig. (Key- 
No.) I 95; Cent. Dig. H m-HO. 

tT Robinson y. Gould, 11 Cush. (Mass.) 55 ; Plummer y. People, 16 111. 858 ; 
Phillips y. Henry, 160 Pa. 24, 28 AtL 477, 40 Am. St Rep. 706; Jones y. 
Tomer, 6 Litt (Ky.) 147; Wright y. Remington, 41 N. J. Law, 48» 32 Am. 
Rep. 180; Spaulding y. Crawford, 27 Tex. 155; Lewis y. Bannister, 16 Gray 
(Biasa.) 600 (creditors). A surety cannot ayoid a common-law bond or note 
on the ground that his principal was under duress. Huscombe y. Standing, 
Cra Jac. 187 ; Graham y. Marks, 98 Ga. 67, 26 S. B. 931. Contra, Strong y. 
Orannls, 26 Barb. (N. Y.) 122. But it is otherwise In the case of statutory 
bonds, such as a bond giyen under a statute to release the principal from 
imprisonment, where the imprisonment is illegal. In such case the officer has 
no right to take the bond, and it is yoid. Thompson y. Lockwood, 16 Johna 
(N. Y.) 256. And see State y. Brantley, 27 Ala. 44; Patterson y. Gibson, 81 
Ga. 802, 10 S. E. 9, 12 Am. St Rep. 356 ; Fisher y. Shattuck, 17 Pick. (Mass.) 
252; Jones y. Turner, 6 Litt (Ky.) 147. But see Plummer y. People, 16 111. 
358; Huggins y. People, 89 IlL 246; Inhabitants of Bordentown Tp. y. Wal- 
lace, 60 K. J. Law, 13, 11 AtL 267. Bee '^Oontracie;* Deo. Dig. (Key-No.) | 
95; Cent. Dig. U W-W. 

«• Ante, p. 163. 



304 EBALITT OF CONSENT (Ch. T 

fegard a person as under duress who enters into a contract to 
relieve a stranger, it is otherwise where the person relieved is a 
near relative, as a husband, wife, parent, or child.** These arc 
the only relationships generally mentioned in the books, but the 
rule has been extended to other relationships, as of brother^ sister, 
grandparent, or grandchild.** i ^j) ^/U 

By Whom A /vV 

The duress, to be available as a defense, must have been inflicted / 
or threatened by the other party to the contract, or by some one 
acting with his connivance.** A person entering into a contract 
with another under duress exercised by a third person may avoid 
the contract if the third person was the other party's agent, or 
if the other party knew the circumstances,** but not if he acted in 
good faith and without such knowledge. , x . / / 

EWect • .Uc^ K.^1 -- f^^' "- 

A contract is not void because it was entered into under duress, 
but, as in the case of fraud, is merely voidable at the option of 
the injured party,** and stands unless he sees fit to avoid or rescind 

*• Harris ▼. Cannody, 181 Mass. 51, 41 Am. Rep. 188; Plummer t. People^ 
16 111. 360; First Nat Bank t. Bryan, 62 Iowa, 42, 17 N. W. 165; Lomeraon 
▼. Johnston, 44 N. J. Eq. 98, 13 Atl. 8; Brooks y. Berryhill, 20 Ind. 97; South- 
ern Exp. Co. T. Duffey, 48 Ga. 361; Adama y. Bank, 116 N. Y. 606, 23 N. B. 7, 
6 L. R. A. 481, 15 Am. St Rep. 447; McClatchle T. Haslam, 63 Law T. 876; 
Meech y. Lee, 82 Mich. 274, 46 N. W. 883 ; Bryant T. Peck, 154 Mass. 460, 28 
N. E. 678 ; aty Nat Bank y. Kusworm, 88 Wis. 188, 50 N. W. 564, 26 L. R. A. 
48, 43 Am. St Rep. 880; Giddinga T. Iowa Say, Bank, 104 Iowa, 676; 74 N. W. 
21 ; Heaton y. Norman Ck>.'B Bank, 50 Kan. 281, 52 Pac. 876 ; Dayia y. Smithy 
68 N. H. 253, 44 AU. 384, 73 Am. St Rep. 584 ; International Haryester Co. y. 
VoborU, 187 Fed. 073, 110 Q Q A. 81X Bee '*C<mtract$;' Deo. Dig. (Key-Vo.) 
I 95; Cent, Dig. {| m^^iO. 

•0 Schnltz y, Catlln, 78 Wis. 611, 47 N. W. 946; Bradley y. Irish, 42 lU. 
App. 85 ; Nebraska Mnt Bond Ass'n y. Elee, 70 Neb. 383, 97 N. W. 476. It 
seems that it does not extend to master and seryant 1 RoUe, Abr. 687 ; Bac. 
Abr. "Duress," B; 2 Brownl. 27a See '^ContracU,'* Deo. Dig. {Key-lfo.) | 95; 
Cent. Dig. {{ iSl'UO. 

»il Rolle, Abr. 688; Fairbanks y. Snow, 145 Mass. 153, IS N. E. 506» 1 
Am. St Rep. 446; Fightmaster y. Leyi (Ky.) 17 S. W. 195; Sherman y. Sher- 
man (Com. PL N. Y.) 20 N. Y. Snpp. 414 ; Compton y. Bank, 96 HI. 801, 36 
Am. Rep. 147; Schwartz y. Schwartz, 29 IlL App. 516; Mullin y. Leamy, 80 
N. J. Law, 484, 79 AtL 257; Ely v. Hartford Life Ins. Co., 128 Ky. 799, 110 
S. W. 265, 33 Ky. Law Rep. 272. Bee ** Contracts,*' Deo. Dig. (Key-No.) | 95; 
Cent. Dig. |{ 4^1-440. 

•2 GALUSHA V. SHERMAN, 105 Wis. 263, 81 N. W. 495, 47 L. B. A. 417. 
Throckmorton Cas. Contracts, 200; Fairbanks y. Snow, supra; McQatchie y 
Haslam, 63 Law T. 87& See '^Contracts;* Deo. Dig. (Key-No.) | 95; Cent. 
Dig. H 491-^0. 

»» Royal y. Goss, 154 Ala. 117, 45 South. 281, in which, howeyer, it is sug- 



S§ 145-146) xrsDvn influenob 805 

it He may cither ratify or disaffirm it, and may do so by his 
conduct.** The rules as to the right to rescind a contract for fraud 
apply with equal force here, and it is unnecessary to repeat them. 

UNDUE INFLUENCE y^>CC^ J ^ 7^ 

145. Undue influence is a species of fraud. It may be said gen- * 

erally to consist — 

(a) In the use by one in whom confidence is reposed by another, 

or who holds a real or apparent authority over him, of 
such confidence or authority for the purpose of obtain- 
ing an unfair advantage over him. 

(b) In taking an unfair advantage ^ of another's weakness of 

mind. 

(c) In taking a grossly oppressive and unfair advantage of an- 

other's necessities aind distress. / 

146. EFFECT. Undue influence renders a contract voidable at 

the option of the injured party. 

Courts of equity have always given a wider interpretation to tKe 
t^rm "fraud" than that adopted by the courts of common law. 
Looking beyond definite false and fraudulent statements, they 
have inferred from a long course of conduct, from the peculiar 
relations of the parties, or from the circumstances of one of them* 
that an unfair advantage has been taken of the promisor, and 
that his promise ought not, in equity, to bind him. The taking 
of such an unfair advantage is sometimes called "fraud," but it is 
more convenient, for the purpose of distinguishing it from the 
kind of fraud with which we have already dealt, to call it the 
"exercise of undue influence." •• It is difficult to give a clear and 



gested that the contract wlU be Told if the duress Is so seyere that the per* 
son on whom it is imposed is converted into a mere automaton, fifea ^Cwir 
traeU,^ Deo, Dig. (Key-No,) | 95; Cent. Dig, if kSl-W, 

S4 Mmer y. Minor, 98 Mich. 163, 57 N. W. 101, 89 Am. St Rep. 624 ; Fair- 
banks y. Snow, 145 Masa 153, 18 N. B. 596, 1 Am. St Rep. 446; Orclg(Ki Pac 
R. CkK y. Forrest, 128 N. Y. 83, 28 N. E. 187; Veach y. Thompson, 15 Iowa, 
880; Belote y. Henderson, 5 Cold. (Tenn.) 472, 98 Am. Dec. 432; Brown y. 
Pedc, 2 Wis. 261 ; Deputy y. Stapleford, 19 Gal. 802 ; Ebersteln y. Willets, 134 
' IlL 101, 24 N. B. 967; Bush y. Brown, 49 Ind. 577, 19 Am. Rep. 695; Sorn- 
borger y. Sanford, 84 Neb. 498, 52 N. W. 368 ; Commercial Nat Bank y. Wheel- 
wAi, 62 Ohio St 584, 40 N. E. 636, 49 Am. St. Rep. 738. Ante, p. 291. A nego- 
tiable instmment executed nnder duress is binding in hands of bona fide pur- 
chaser for Talue. Hogan y. Moore, 48 Ga. iri6 ; Clark y. Pease, 41 N. H. 414 ; 
Thompson y. Niggley, 53 Kan. 664, 35 Pac. 290. 26 L. R. A. 803. £fes "Co»- 
tracisr Dec Dig. (Kev-yo.) | 96; Ceni. Dig. |{ iSl-i^O. 

«• Anson, Cont (4th Ed.) 166. 

Olabx Cont.(3d Ed.) — 20 



306 RBALITY OF CONSENT (Ch. 7 

concise definition of "undue influence" because of the wide mean- 
ing of the term. The definition given in the black-letter text, 
and taken substantially from the proposed New York Code, is 
probably as good as can be framed without going beyond a mere 
definition.** Another good definition is given by an English judge, 
who, in speaking of the sort of cases "which ♦ ♦ ♦ raise, from 
the circumstances and conditions of the parties contracting, a 
presumption of fraud," says: "Fraud does not here mean deceit 
or circumvention; it iheans an unconscientious use of the power 
arising out of these circumstances and conditions ; and, when the 
relative position of the parties is such. as prima facie to raise 
this presumption, the transaction cannot stand unless the person 
claiming the benefit of it is able to repel the presumption by con- 
trary evidence, proving it to have been, in point of fact, fair, just, 
and reasonable." •* 

Neither in law nor in morals is a person standing in confidential 
relations to another prohibited from exerting any influence what- 
ever to obtain a benefit to himself. The influence must be what 
the law regards as "undue influence." •• "Influence obtained 
by modest persuasion, and arguments addressed to the under- 
standing, or by mere appeals to the affections, cannot properly 
be termed 'undue influence' in a legal sense ;■• but influence ob- 
tained by flattery, importunity, superiority of will, mind, or char- 
acter, or by what art soever that human thought, ingenuity, or 
cunning may employ^ which would give dominion over' the will" 
of a person "to such an extent as to destroy the free agency,** 
or constrain him to do against his will what he is unable to 
refuse, is such an influence as the law condemns as undue." *^ 

•• Proposed N. Y. Qv. Code, | 231. 

ST Lord Selboume, in Earl of Aylesford y. Morris, 8 Ch. 490. See, also, 
Green t. Roworth, 113 N. Y. 402, 21 N. B. 165 ; In re Nelson's Will, 89 Minn. 
204, 89 N. W. 143. See ""Contraete," Deo. Dig. {Key-No.) ^ 96; Cent. Dig. || 
UU 1155, 1169. 

»• Wallace t. Harris, 82 Mich. 397. Bee ''ContraeU,'* Deo. Dig. (Key-No.) | 
96; Cent. Dig. || +M, 1155, 1169; "Deed*,- Deo. Dig. (Key-No.) | 72; Cent. 
Dig. {{ 190-199. 

•» Rogers v. Higgins, 57 HL 244; Wise T. Foote, 81 Ky. 10; Hale v. Cole, 31 
W. Va. 576, 8 S. B. 516 ; Belth v. Beith, 76 Iowa, 601, 41 N. W. 371 ; Black v. 
Foljambre, 39 N. J. Eq. 234 ; Bturtevant v. Stnrtevant, 116 HI. 340, 6 N. B. 428 ; 
Bowdoin CoUege v. Merrett (C. C.) 75 Fed. 480; In re Coleman's Estate, 193 
Pa. 605, 44 Ati. 1065 ; Du Bose t. KeU, 90 S. C. 196, 71 S. B. 371 (full state- 
ment of rules) ; Fjone v. FJone, 16 N. D. 100, 112 N. W. 70. Bee ''Contracted 
Deo. Dig. (Key-No.) | 96; Cent Dig. {$ 441, 1155, 1169. 

40 Latham ▼. Udell, 38 Mich. 238 ; Layman y. Conrey, 60 Md. 286. See "Con- 
tracts,*' Deo. Dig. (Key-No.) | 96; Cent. Dig. || HI, 1155, 1169. 

«i Schofield ▼. Walker (In re Disbrow's Estate) 68 Mich. 96, 24 N. W. 624. 



§§ 145-3^6) UNDUE IKFLUENOB 807 

The Presumption from Circumstances 

When it is said tha^ equity presumes prima facie the exercise of 
undue influence from the circumstances, we mean that, when certain 
circumstances are shown to have existed, the court will, from that 
alone, hold that the contract was procured by undue influence, and 
will relieve the promisor unless the promisee assumes the burden 
of p^oof, and shows that everything was fair and just.** In some 
cases the relation alone, being confidential, raises the presumption. 
In others, the confidential character of the relation must be shown. 
In others, want or inadequacy of consideration will raise the pre- 
sumption.** 

"We may therefore frame the question we have to discuss some- 
what in this way: When a man demands equitable remedies, either 
as plaintiff or defendant, seeking to escape the effects of a grant 
which he has made gratuitously, or a promise which he has given 
upon a very inadequate consideration, what must be shown in addi- 
tion to this in order to raise the presumption that undue influence 
has been at work?" ** 

Relationship of Parties — Parental and Quasi Parental Relation 

One class of circumstances which will raise the presumption that 
undue influence was used in procuring another to enter into a con- 
tract is where the party benefited stood in some such relation to him 
as to render him peculiarly subject to influence. Parental or quasi 
parental relations subsisting between promisor and promisee, or 
grantor and grantee, will raise this presumption.** Where an or- 

8ee ^'ContraciM/* Dee. Dig. (Key-yo.) | 96; Cent. Dig. || 44i, 1155, 1169; 
^'WiUsr Deo. Dig. (Kev-No.yU 1 55-159; Cent. Dig. || 575-^87. 

4s McPARLAND r. LARKIN, 156 IlL 84, 89 N. E. 609, Throckmorton Cas. 
Contracts, 212; Dent t. Bennett, 4 Mylne & 0. 269; Ck)wee ▼. Ck)mell, 75 N. 
T. 91, 81 Am. Rep. 428, at page 99; Fisher ▼. Bishop, 108 N. Y. 25, 15 N. B. 
381, 2 Am. St Rep. 857 ; Woodbury y. Woodbury, 141 Mass. 829, 5 N. E. 275, 
55 m. Rep. 479 ; Greenfield's Estate, 14 Pa. 489 ; Jones ▼. Lloyd, 117 lU. 597, 7 
N. EL 119; Sands t. Sands, 112 111. 225; Ward y. Armstrong, 84 IlL 151; 
Zeigler y. Hughes, 55 111. 288; Jennings y. McConnel, 17 IlL 148; Casey y. 
Casey, 14 lU. 112. See ''ContracU;' Deo. Dig. (Key-No.) | 96; Cent. Dig. |{ 
4U, 1169. 

«s Ante, p. 144. The acceptance of a yoluntary donation throws upon the 
acceptor the necessity ot proying that the transaction was Just Houghton y. 
Houghton, 15 Beay. 299. See **Oifte," Dec. Dig. (Key-No.) | 47; Cent. Dig. || 
81-86; **Parent and Child,'' Cent. Dig. | ISl. 

** Anson, Cont (4th Ed.) 166. 

«s Taylor y. Taylor, 8 How. 183, 12 U Ed. 1040; Miskey's Appeal, 107 Pa. 
eil ; Noble's Adm'r y. Moses, 81 Ala. 530, 1 South. 217, 60 Am. Rep. 175 ; 
Highberger y. Stiffler, 21 Md. 338, 83 Am. Dec 593 ; Berkmeyer y. Kellerman, 
82 Ohio St 239, 30 Am. Rep. 577; Brown y. Burbank, 64 CaL 99, 27 Pac. 940; 
Clutter T. Clutter, 4 B. W. 182, 8 Ky. Law Rep. 956 ; Sayles t. Christie, 187 




508 REALITY OF CONSENT (Ch. 7 

phan who had been living with her uncle for seven years became se- 
curity for him sqoii after attaining her majority, it was said by the 
court, adverting to the fact that the security was obtained, through 
the influence of one standing in loco parentis, from the object of his 
protection and care: "This is a transaction which, under ordinary 
circumstances, this court will not allow. ♦ ♦ ♦ This court does 
not interfere to prevent an act, even of bounty, between parent and 
child, but it will take care (under the circumstances in which the 
parent and child are placed before the emancipation of the child) 
that such child is placed in such a position as will enable him to 
form an entirely free and unfettered judgment, independent alto- 
gether of any sort of control." *• 

Same — Other Family Relations 

The term "parental relations" applies, not only to the actual rela- 
tion of parent and child, and of one in loco parentis and child, but 
extends to husband and wife, brother and brother or sister, and to 
all cases in which one member of a family, from age, character, or 
circumstances, exercises a substantial preponderance of authority in 
the family councils.*^ 

Same — Fiduciary Relations 

Persons standing in a fiduciary relation occupy a relation of con- 
fidence, and are within this equitable rule. A contract between a 
trustee and his cestui que trust,** or between a guardian and his 

lU. 420, 68 N. B. 480. But s^ Joiklns t. Pye, 12 Pet 241, 9 L. Ed. 1070. Bee 
**Par€nt and Ohildr Deo. Dig, (Key-No.) | 9; Cent. Dig. |{ 7-1. 111-195. 

«• Archer y. Hudson, 7 Bear. 660. Bee "Parent and Child,'* Dee. Dig. (Kew 
No.) I 9; Cent. Dig. {{ 74, 111-1S5. 

*T Green v. Roworth, 113 N. Y. 402, 21 N. B. 165 ; Harvey t. Mount, 8 Bear. 
439 ; Graham v. Bnrch, 44 Minn. 33, 46 N. W. 148 ; Smyley y. Reese, 63 Ala. 89,- 
26 Am. Rep. 698; Watkins y. Brant, 46 Wis. 419, 1 N. W. 82 ; Bowe y. Bowe, 
42 Mich. 196, 8 N. W. 843 ; Gliding y. Golding, 82 Ky. 61 ; Swlsshelm's Ap- 
peal, 66 Pa. 475, 94 Am. Dea 107 ; Hill t. Miller, 60 Kan. 669, 82 Pac 354 ; 
Scarborough y. Watkins, 9 B. Mon. (Ky.) 640, 60 Am. Dec 628; Brown T. 
Burbank, 64 Cal. 99, 27 Pac. 940; Greene y. Greene, 42 Neb. 634, 60 N. W. 
937, 47 Am. St Rep. 724 ; Woods y. Roberts, 186 111. 489, 67 N. B. 426 ; Bowen 
y. Kutzner 167 Fed. 281, 93 C. C A. 33 (brother and sister) ; Ziegler y. Shuler, 
8T S. 0. 1, 68 S. B. 817. No presumption of fiduciary relation arises from 
mere proof that the parties are brothers, but may be shown by eyidence that 
confidence was actually reposed and abused. Shevlin y. Shevlin, 96 Minn. 398, 
106 N. W. 257. Bee "Contracts^' Dec, Dig. (Kev-yo.) { 96; Cent. Dig. U Ul, 
1169; "Wills,*' Deo. Dig. {Key-yo.) § 151; Cent, Dig, §{ 585, 58^. 

*» Spencer's Appeal, 80 Pa. 317; Ward y. Armstrong, 84 111. 161; Jones 
y. Uoyd, 117 111. '697, 7 N. B. 119 ; Nichols y. McCarthy, 63 C5onn. 299, 23 Atl. 
93, 56 Am. Rep. 105; McCants y. Bee, 1 McCJord, Bq. (S. C) 383, 16 Am. Dec 
610. Principal and agent Burke y. Taylor, 94 Ala. 530, 10 South. 129. Bee 
"Guardian and Ward,*' Dee. Dig. (Key-No.) i 69; Cent. Dig. || SW, S05-^07; 
"Trusts,** Dee. Dig, (Key-No,) | $8$; Cent. Dig. {f 403, 404. 



/O'O. "^^ ^'-'^ 



§§ 146-146) UNDUE INTLUEXCB 309 

ward,** IS looked upon with suspicion. It is presumed that the 
trustee or guardian who is benefited by the promise of his cestui 
que trust or ward has used his peculiar position of confidence to his 
own advantage, and, in order that the contract may stand, he must 
show the contrary. 

Same — Other Confidential Relations 

The power which a spiritual adviser may acquire over persons 
subject to his influence is also looked upon as raising the presump- 
tion of undue influence ; •• and to this may be added a number of 
other relations, such as attorney or solicitor and client,'^ and doctor 
and patient.** The relations mentioned are not all.** The courts 
have not limited or defined the relations which they will regard as 
raising this presumption of influence. The principle, it is said, ap- 
plies to every case where "influence is acquired and abused, where 
confidence is reposed and betrayed." ** Thus, where a young man 

«• McPARLAKB r. LARKIN, 155 lU. 84, 89 N. E. e09, Throckmorton Gas. 
Contracts, 212 ; Ashton y. Thompison, 82 Bllnn. 25, 18 N. W. 918 ; Wicklser ▼. 
Cook, 85 111. 68; Wade v. Pulslfer, 54 Vt 45; Bowe v. Bowe, 42 Mich. 195, 3 
N. W. 848 ; Garvin's Adm*r v. Williams, 44 Mo. 465, 100 Am. Dec. 814 ; Id., 50 
Mo. 206. Bee **€hiardian and Ward,** Deo. Dig, (Key-No.) | 69; Cent. Dig. {| 
261, 505^07. 

BO Hnguennin y. Baseley, 14 Yes. 273 ; Marx y. McOlynn, 88 N. T. 857 ; Cor- 
rigan y. Pironi, 48 N. J. Eq. 607, 23 Atl. 855 ; Ross y. Conway, 92 CaL 632, 
28 Pac. 785 ; Finegan y. Theisen, 02 Mich. 173, 52 N. W. 619 ; Ford y. Hen- 
nessy, 70 Mo. 580. Spirit medium's influence oyer beUeyer in spiritualism. 
Thompson y. Hawks (C. C) 14 Fed. 002 ; Connor y. Stanley, 72 Cal. 556, 14 
Paa 306, 1 Am. St Rep. 84. Bee '*ContractM** Dec. Dig. (Key-No.) { 96; Cent. 
I>i0' H Wf li^9; *'Wilur Dec Dig. {Key-No.) % 157; Cent. Dig. U S8S, 984. 

Bi St Leger's Appeal, 34 Conn. 434, 91 Am. Dec 735; Carter y. West, 98 
Ky. 211, 19 S. W. 592 ; McGinn y. Tobey, 62 Mich. 252, 28 N. W. 818^4 Am. St 
Rep. 848 ; Jennings y. McConnel, 17 IlL 148 ; Zeigler y. Hughes, 55 HI. 288 ; 
Ryan y. Ashton, 42 Iowa, 365. Bee ** Attorney and Client;* Deo. Dig. {Key-No.) 
1 123; Cent. Dig. {$ 2S9-249. 

B> Andenreid's Appeal, 89 Pa. 114, 33 Am. Rep. 781 ; Woodbury y. Woodbury, 
141 Mass. 329, 5 N. E. 275, 55 Am. Rep. 479 ; Dent y. Bennett 4 Mylne & C. 
269 ; Blackie y. Clark, 15 Beay. 603 ; CadwaUader y. West 48 Mo. 483 ; Wat- 
son y. Mahan, 20 Ind. 227 ; Viallet y. Consolidated Ry. & Power Co., 30 Utah, 
260. 84 Pac. 496, 5 L. R. A. (N. S.) 613. Bee '^Contracts,** Dec. Dig. (Key-No.) 
i 96; Cent. Dig. U +»i, ^i^B; "Wills;* Deo. Dig. (Key-No.) 1 157; Cent. Dig. 
H 585, $84. 

BBDent y. Bennett 4 Mylne & C. 269; Drake's Appeal, 45 Conn. 9; Boyd 
T. De La Montagnle, 73 N. Y. 498, 29 Am. Rep. 197; Pierce y. Pierce, 71 N. 
Y. 154, 27 Am. Rep. 22; Darlington's Appeal, 86 Pa. 512, 27 Am. Rep. 726; 
Bockafellow v. Newcomb, 57 111. 186; CadwaUader y. West 48 Mo. 483; Caa- 
parl y. Church, 82 Mo. 649; Allcord v. Skinner, 36 Ch. Diy. 145; Hessick y. 
Hessick, 16i» IlL 486, 48 N. E. 712; RusseU y. Russell, 60 N. J. Eq. 282, 47 
AtL 37. As to master and seryant Doran y. McConlogue, 150 Pa. 98^ 24 
AtL 857. Bee *'ContracU:* Dec. Dig. (Key-No.) | 96; Cent. Dig. (f 44^, ^1^^- 

•« Seam y. Shaf er, 6 N. T. 268 ; Fisher y. Bishop, 108 N. Y. 25, 15 N. B. 



310 REALITY OF CONSENT (Ch. T 

who had just attained his majority incurred heavy liabilities to a 
person by the contrivance of an older man who had acquired a 
strong influence over him, and who professed to assist him in a 
career of extravagance and dissipation, it was held that influence of 
this nature entitled the young man to /the protection of the court. 
"The principle," it was said, "applies to every, case where influence 
is acquired and abused, where confidence is reposed and betrayed. 
The relations with which the court of chancery most ordinarily deals 
are those of trustee and cestui que trust, and such like. It applies 
especially to those cases, for this reason, and for this reason only : 
that from those relations the court presumes confidence put and in- 
fluence exerted, whereas, in all other cases where those relations do 
not subsist, the confidence and the influence must be proved ex- 
trinsically. But, where they are proved extrinsically, thie rules of 
reason and common sense, and the technical rules of a court of 
equity, are just as applicable in the one case as the other." •• 

Same — Continuance of Presumption 

The presumption of undue influence from the parental or quasi 
parental relation does not cease as soon as the child becomes of age 
and is emancipated in law. His judgment must also be emancipat- 
ed. The confidential relation and consequent presumption of undue 
influence continues until the child is entirely released from any sort 
of control ; •• and the same principle applies to the relation of guard- 
ian and ward and the other confidential relations.'^ 



331, 2 Am. St Rep. 857 ; Long ▼. Mulf ord, 17 Ohio St 484, 98 Am. Dec. 638 ; 
Leighton v. Orr, 44 Iowa, 679 ; Haydock ▼. Haydock's Ex'rs, 34 N. J. Eq. 670, 
88 Am. Rep. 885; McCk>rmick y. Malln, 6 Blackf. (Ind.) 509; Todd y. Groye» 
33 Md. 188; Cherbonnier y. Eyitts^ 66 Md. 276; Hansen y. Berthelsen, 19 
Neb. 433, 27 N. W. 423 ; McClure y. Lewis, 72 Mo, 314 ; Williams y. Collins, 
67 Iowa, 413, 25 N. W. 682 ; Hanna y. Wilcox, 53 Iowa, 647, 6 N. W. 717 ; 
Reed y. Peterson, 91 lU. 288; Norris y. Tayloe, 49 IlL 17, 95 Am. Dec. 668; 
Courtney y. Blackwell, 150 Mo. 245, 61 S. W. 668. See **Coniract9,*' Dec. 
Dig. (KeV'No.) § 96^' Cent. Dig. {§ 44^, H^^ 

»6 Smith y. Kay, 7 H. L. Cas. 750, 779. See, also, Knott y. Tidyman, 86 
Wis. 164, 56 N. W. 632. Bee **Contra€ts;' Dec. Dig. {Key-No.) i 96; Cent. 
Dig. tl W, 1169. 

»« Archer v. Hudson, 7 Beay. 560 ; Ashton y. Thompson, 82 Minn. 25, 18 
N. W. 918; Noble's Adm'r y. Moses, 81 Ala. 630, 1 South. 217, 60 Am. Rep. 
175 ; Miller y. Simonds, 72 Mo. 669 ; White y. Ross* 160 IlL 66, 43 N. E. 336. 
See '^Contracts," Dec. Dig. (Key-No.) § 96; Cent. Dig. }§ 4J^, 1169; '*Pareni 
and Child,*' Dec. Dig. {Key-No.) | 9; Cent. Dig. {{ 74, 111-185. 

BT McPARLAND y. LARKIN, 155 111. 84, 39 N. E. 609, Throckmorton Cas. 
Contracts, 212; Rhodes y. Bates, L. R. 1 Ch. 252; Mitchell y. Homfray, 8 
Q. B. Diy. 587. See **Ouardian and Ward;' Dec. Dig. (Key-No.) | 69; Cent. 
Dig. |§ 261, S05-307. 



§§ 145-146) ' UNDUE INFLUBKCa 811 

Satne — Rebuttal of Presumption 

Where a presumption of undue influence exists by reason of the 
relations of the parties, it has been said that to render the transac- 
tion valid it is only necessary to ^ow that the other party had com- 
petent and disinterested advice, or that he performed the act or en- 
tered into the transaction voluntarily, deliberately, and advisedly, 
knowing its nature and effect, and that his consent was not obtained 
by reason of the power and influence to which the relation might be 
supposed to give rise." •• 

Mental Weakness 

Mere weakness of intellect, not so great as to render the person 
non compos mentis, will not of itself affect the validity of a con- 
tract.** If, however, the other party has taken advantage of such 
weakness, and by the use of fraud and undue influence has made an 
unfair contract, it will be set aside.** 

Personal Influence Absent — Advantage Taken of Another^ s Necessi- 
ties and Distress 
The doctrine of undue influence has been extended to a class of 
cases from which the element of personal influence is altogether ab- 
sent. They all appear to possess these common features, namely, 
that the promisor incumbers himself with heavy liabilities for the 
sake of a small gain, or, at any rate, an inadequate present gain; 
and the promisee takes advantage either of the improvidence and 
moral weakness, or else of the ignorance and unprotected situation 
of the promisor, or, as stated in the black-letter text, takes an unfair 
advantage of the promisor's weakness of mind,*^ or of his necessities 

»• Zelgler t. Illinois Trust & Sayings Bank, 245 IlL 180, 91 N. B. 1041, 28 
L. R. A. (N. S.) 1112, 19 Ann. Cas. 127. And see FJone y. FJone, 16 N. D. 
100, 112 N. W. 70. Be9 ''ContracU;^ Deo. Dig. (K^-yo.) { 96; Cent. Dig. ii 
+M, 1^69. 

•• Ante, p. 224. 

••Norton y. Norton, 74 Iowa, 161, 87 N. W. 129; Tracey y. Sacket, 1 
Ohio St 54, 68, 59 Am. Dec. 610; Klder y. Miller, 86 N. T. 507 ; Morton's Adm'r 
y. Morton (N. J. Ch.) 8 AU. 807; Oakey y. Ritchie, 69 Iowa, 69, 28 N. W. 
448; Allore y. Jewell, 94 U. S. 506, 24 L. Ed. 260; Griffith y. Godey, 113 
U. S. 89, 5 Sap. Gt 388, 28 L. Ed. 934 ; Fishbume y. Ferguson's Heirs, 84 Va. 
87, 4 S. B. 575; Moore y. Moore, 56 Cal. 89; Rippy y. Grant, 39 N. C. 443; 
Churchill y. Scott, 65 Mich. 485, 32 N. W. 737 ; Zelgler y. Shuler, 87 S. C. 1, 
68 S. B. 817; Foote y. De Poy, 126 Iowa, 366, 102 N. W. 112, 68 L. R. A 
302^ 106 Am. St Rep. 365 (mental weakness from age) ; Miller y. Sterringer, 
66 W. Va. 169, 66 S. B. 228, 25 L. R. A. (N. S.) 596 (mental weakness from 
liquor furnished by other party). See **ContraetM,*' Dec Dig. (Key-No.) i 
96; Cent. Dig. || Ul, 1169. 

•1 Selden y. Myers, 20 How. 506, 15 L. Bd. 976. Bee '^Contracts,*' Dee. Dig. 
(Key-No.) || 96, 99; Cent. Dig. || 441$ 448, 1169. 



y 



312 BBALITY OF CON8KNT * (Ch. T 

and distress." The law has attempted by statute !n some Jurisdic- 
tions, as in case of the usury laws, to guard against advantage being 
taken against persons in such a situation, and courts of equity at 
one time adopted a rule that purchasers of any reversionary inter- 
est might always be called upon to show that they had given full 
value for their bargains, so that they might not take advantage of 
a man's present necessities- to deprive him of his future estates with- 
out reasonable return.** • The usury laws do not exist in all juris-/ 
dictions, and the rule as to reversionary interests has been, to a 
great extent, abrogated by statute in England, and is recognized in 
very few cases with us. If, however, a man, even in the absence of 
usury laws, takes advantage of the present poverty of an expectant 
heir to extort from him an exorbitant and ruinous rate of interest^ 
he is liable to have the bargain set aside, and to be remitted to his 
claim for the amount of money he has actually advanced, with the 
current rate of interest upon it.** '*In ordinary cases," it is said, 
"each party to a bargain must take care of his own interest, and it 
will not be presumed that undue advantage or contrivance has been 
resorted to on either side ; but in the case of 'the expectant heir,*^ 
or of persons under pressure without adequate protection, and in 
the case of dealings with uneducated, ignorant persons, the burden 
of showing the fairness of the transaction is thrown on the person 
who seeks to obtain the benefit of the contract." *• The court will 
look to the reasonableness of the transaction under all the circum- 
stances of the case ; and if it appears that one has taken advantage 
of the unprotected condition of the other to drive a hard bargain,. 

•« Moore v. Moore, 81 Cal. 105, 22 Pac. 589, 874; Wooley v. Drew, 49 Mich. 
200, 13 N. W. 594 ; McCants v. B^ 1 McCord, Eq. (S. C.) 883, 16 Am. Dec. 
610. Bee ''ContractB,^ Dec Dig. (Key-Vo,) {| 96, 99; Cent. Dig, || 44i, 4^8, 
1169. 

e» Chesterfield y. Jansen, 2 Ves. 125; 1 White & T. LeatL Caa. Eq. 428; 
Jenkins v. Pye, 12 Pet 241, 9 L. Ed. 1070. Bee **ContracU,** Deo. Dig. (Key- 
No.) i 96; Cent Dig. §§ U^, 1169; "Cancetlation of Inatrumenti,** Dec. Dig. 
(Key-No.) §8 45, 47; Cent. Dig. {§ 100-lOS. 

•*Aylesford v. Morris, 8 Ch. 484; Anson, Cont (4th Ed.) 169. And see 
cases cited In note 66, Infra. The mere fact, however, that exorbitant Inter- 
est Is charged does not show that the contract Is unconscionable. Whlttler 
▼. Collins, 15 R. I. 44, 23 Atl. 39. Where there Is no actual fraud, and no 
fiduciary relation between the purchaser of a reversionary Interest and his 
vendor, mere Inadequacy of consideration is not sufficient to avoid the sale 
unless It is so great as to shock the moral sense. Mayo*s Ex'r v. Carrlngton*s 
Bx'r, 19 Grat (Va.) 74; Crlbblns v. Markwood, 13 Grat (Va.) 495, 67 Am. 
Dec. 775. And see Parmelee v. Cameron, 41 N. Y. 392; Davidson v. Little, 
22 Pa. 245, 60 Ajn. Dec. 81. Bee "Contracts,'' Dec. Dig. (Key-No.) { 96; Cent. 
Dig. §1 Ul, 1169; ^^ReverHom,** Dec. Dig. (Key-No.) § 7; Cent. Dig. | 7. 

•sQ'Rorke v. Bollngbroke, 8 App. Cas. 823. Bee ""OontractM," Deo. Dig. 
(Key-No.) II 96, 99; Cent. Dig. || 441, 44S, 1169. 



S§ 145-146) 0NDUS INFLUENCE 813 

whether such condition arose from mental or moral weakness or ig- 
norance, or from present necessity and distress, the transaction will 
not be allowed to stand.** 

Another case in which this rule has been applied is in the case of 
a sale of the equity of redemption by a mortgagor to the mortgagee. 
The sale may be avoided by the mortgagor if any undue advantage 
was taken of his necessities.*' 

Effect 

The rules respecting the right to rescind contracts entered into 
under undue influeilce follow, so far as equity is concerned, the rules 
which apply to fraud,** but with one noticeable qualification. In 
the case of fraud, so soon as the fraud is discovered, the parties are 
placed on equal terms, and an affirmation of the contract binds the 
party who was originally defrauded ; but in the case of undue in- 
fluence it is not a particular statement, but a combination of circum- 
stances, which constitutes the vitiating element in the contract, and 
unless it is clear that the will of the injured party is relieved from 
the dominant influence under which it has acted, or that the imper- 
fect knowledge with which he entered into the contract is supple- 
mented by the fullest assistance and information, an aflirmation 
will not be allowed to bind him.** And where it appears that the 
undue influence existed up to the death of the party, the contract 
may be avoided by his heirs.'* 

As in the case of duress, the undue influence must have been ex- 
ercised by or with the cognizance of the other party.'* 

••Btoyon y. Ck>ok, 10 Ch. 389; Hough's Adm'rs t. Hunt, 2 Ohio, 495, 
15 Am. Dec 569; Boynton t. Hubbard, 7 Masa 112; Parsons t. Ely, 45 lU. 
232 ; Butler ▼. Duncan, 47 Mich. 94, 10 N. W. 123, 41 Am. Rep. 711 ; KeUey 
v. CapUce, 23 Kan. 474, 88 Am. Rep. 179; Jenkins y. Pye, 12 Pet 241, 9 L. 
Ed. 1070; Bacon t. Bonham, 83 N. J. Eq. 614, 617; Mastln y. Marlow, 65 N. 
C. 695. Bee "ContraeU,'' Dec Dig. {Key-No,) | 96; Cent Dig. %% Ul, 1169. 

«T Peugh V. Davla, 96 U. S. 337, 24 L. Ed. 775 ; OUrer t. Cunningham (C. C.) 
7 Fed. 689; DorrUl t. Baton, 35 Mich. 802; Jones, Mtg. (5th Ed.) S 711. 
Bee '^Mortgages;' Deo, Dig. {Key-No.) 1 194; Cent. Dig. §| 806-81^. 

•• Burt T. Qulsenberry, 132 111. 385, 24 N. E. 622; City Nat Bank of Dayton 
▼. Kusworm, 91 Wis. 166^ 64 N. W. 843; ante, p. 282. See '* Contract a,*' Dec. 
Dig. {Key-No.) §§ 97, 9S; Cent. Dig. f§ 44^447- 

•• Anson, Cont (4th Ed.) 169 ; Moxom y. Payne, 8 Oh. 881. See "Contracts,'* • 
Dig. {Key-No.) H 97, 98; Cent. Dig. H 44M^7. 

TO Foote T. De Poy, 126 Iowa, 366, 102 N. W. 112, 68 L. R. A. 302, 106 Am. 
8t Rep. 365. Bee "Contracts," Dec. Dig. {Key-No.) §§ 96-98; Cent. Dig. S| 

Ti Dent V. Long, 90 Ala. 172, 7 South. 640. Contra, where the other party 
has not paid a valuable consideration, Graham ▼. Burch, 44 Minn. 33, 46 N. 
W. 148. Bee "Contracts;* Dec Dig. (Key-No.) | 96; Cent. Dig. U 44^, 1169. 






/ 



/ n^'. 



4 



3U 



r" 



u^ * ^ 






V 

LSQALITY OF OBJfiCT 



(Ch.8 



CHAPTER VIII 



147. 

148. 

149. 

150. 

151. 

152. 

163. 
154-155. 

15a 

157. 
158-ieO. 

161. 

162. 

163. 

164. 

165. 
166-160. 
17a-172L 
17S-174. 

175, 
176-177. 
178-180. 

181. 
182-185. 

186. 

187. 



LEGALITY OF OBJECT 

In GeneraL 

Clasalflcation of Unlawfal Agreements.. 

Agreements in Violation of Positiye Law. 

Breach of Rules of Ck>mmon Law. 

Bieacb of Statute— Constitntlonal Law. 

Prohibition by Statute. 

Particular Agreements In Breach of Statute. 
Agreements Contrary to Public Policy. 

Agreements Tending to Injure the Public Serrlca 

Nonoffidal Corruption. 

Perversion or Obstruction of Justice. 

Encouragement of Litigation — Champerty and Maintenance. 

Agreements of Immoral Tendency. 

Agreements Tending to Fraud and Breach of Trust 

Agreements in Derogation of the Marriage RelatloiL 

Agreements in Derogation of Parental Relation. 

Agreements In Restraint of Trade. 

Unlawful Combinations — Monopolies, Trusts, etc. 

Exemption from Liability for Negligence. 
Effect of Illegality — ^Agreements Partly lUegaL 

Object Unlawful but Intention Innocent 

Object Innocent but Intention UnlawfuL 

Promises to Pay Money Due on Illegal Transactions^ 

Relief of Party to Unlawful Agreement 
Conflict of Laws — In Space. / 



In Tlma 



Vt'-^^ 



jivM'-''- 



\K.i( Af 



t 



IN GENERAL 



(JucV 



147. J^ agreement is not enforceable at law, and therefore does 
not result in a contract, if its object is illegal. 

We come now to deal with the only remaining element in the 
formation of a valid contract — ^the legality of the matter or object of 
the agreement. To result in a contract, an agreement must create 
an obligation ; and it does not create an obligation if it is such that 
the courts cannot enforce it. An agreement, therefore, which is jl- 
le^a l jy unlawful, is in fact no contract at all, though it is often 
spoken of as an illegal contractr 

As a rule the law does not interfere with the freedom of persons 
to enter into contracts, but some limitations are imposed. Cerlaiti 
objects are forbidden, and though all the other elements necessary 
to the formation of a valid contract may be present, yet if one of 



§ 149) AQBEEMENTS IN VIOUkTION Or POSITIVE LAW 815 

these forbidden objects is contemplated by the parties, the courts 
will not enforce their agreement The object makes the agreement 
unlawful.^ 



^y 



CLASSIFICATION OF UNLAWFUL AGREEMENTS ^'^ 

148. For convenience in treatment, unlawful agreements may be 

classified, according to their matter or object^ as 

(a) Ayeemen ts in violation of p ositive law; and 

(b) Agreements contrary to public policy. 

The (iistinction here made between agreements in violation ol 
positive law and agreements contrary to public policy is in the rea- 
sons which determine the law to hold the agreement void, and not in 
the nature or operation of the law itself. The nuHity of the agree- 
ment itself is in every case a matter of positive law ; * but in one 
class of cases the acts contemplated by the agreement are prohibited 
by the common law or by statute, while in the other the prohibition 
rests more particularly on public policy, or, as it is sometimes call- 
ed, the "policy of the law." It is not always e&sy to distinguish 
between the two classes, for frequent decisions upon certain mat- 
ters of public policy have established such definite rules regarding 
them that they are in effect rules of the common law. Too much 
importance, therefore, must not be attached to any. classification of 
the subject 

AGREEMENTS IN VIOLATION OF POSITIVE LAW ^rs^^^ 

149. Any agreemeilt which involves the doing of an act which is 

positively forbidden by law, or, what amounts to the same 
thing, the omission to do an act which is positively enjoin- 
ed by law, is illegal and void. Acts may be so prohibited 
or enjoined 

(a) By the rules of the common law; or 

(b ) By statute. 

There are many acts which the law positively forbids or enjoins, 
and to the doing or omission of which some penalty is attached. 

1 Edgar Lumber Co. t. Oomle Stave CJo., 95 Ark. 449, 130 S. W. 452 ; Piper 
V. Boston & M. R. R., 75 N. H. 435, 75 AXL 1041 ; Crigler v. Shepler, 101 Pac. 
ei9, 23 L. R. A. (N. S.) 500, 79 Kan. 834. Be^ ^^ContracU,*" Deo, Dig. (Key- 
No.) I lOS; Cent. Dig. ff 468-476. 

1 Pol. Cont (3d Ed.) 251. 



816 LBQALITY OF OBJECT (Cll. ft 

Whether the prohibition or injunction is by the common law or by 
statute is altogether immaterial. So it does not matter whether the 
act to be performed is malum in se o r ma l um prohibitum, * The act 
or omission prohibited may be some grievous crime, such as mur- 
der; or it may be an act or omission prohibited merely as a police 
regulation, as in the case of statutes regulating the conduct of a par- 
ticular trade or business, with only a small fine as the penalty ; or 
again it may be only a civil wrong. All of these cases ^tand on the 
same footing. If the subject-matter or object of an agreement is 
such that its performance would cpnsist in an act or omission so for- 
bidden, or be so connected therewith as to be in substance part of 
the same transaction, the courts will not enforce it. 



SAME— BREACH OF RULES OF COMMON LAW 



-.vr 




150. The agreements which are illegal because they are in breach 
of rules of the common law are : 

(a) Agreements involving the commission of crime; and 

(b) Agreements involving the conunission of a civil wrong. 

This classification, like that in the preceding section, is, from the 
nature of the subject, only approximate, and for convenience in 
treatment. Many acts are prohibited by statute which were for- 
merly prohibited by the common law, and many acts which are pro- 
hibited by the common law in one state are prohibited by statute in 
another, and in some states there are no common-law crimes at all. 
For this reason, in treating of agreements in breach of rules of the 
common law we must include agreements in breach of statutes 
which are merely declaratory of the common law. 

Agreements Involving the Commission of Crime 

The simplest instance of an agreement contrary, to positi ve law is 
an a g reement to com mit a crime or indictable_offensc. Every agree- 
ment to commit a crime or indictable offense, either as the final ob- 
ject or as a means to an object which, except for such means, would 
be lawful, is illegal and void. ''If one |>ind himself in an obligation 
to kill a man, bum a house, maintain a suit, or tlie like, it is void." ^ 
An agreement, therefore, to write, print, or publish a libelous book 

• Holland V. Sheehan, 108 Minn. 302, 122 N. W. 1, 23 I* R. A. (N. S.) 510, 
17 Ann. Cas. 687. Bee **ContrQCtB,*' Dec. Dig. {Kcy-Ko.) { lOS; Cent. Dig, 

*^Shep. Touch. 87a 



S 150) AOBEEMENTS IN VIOIiATION 07 POSITITB IiAW 3lT 

or article/ or an obscene book, article, or picture * is void. And so- 
it is with an agreement to commit an assault.^ Not only are such 
agreements illegal and void, but the agreement itself is a crime 
known in the criminal law as a ''conspiracy. The crime of con- 
spiracy is also committed in some cases where it is agreed to com- 
mit some civil wrong; but the invalidity of such an agreement does 
not need to rest on its criminal character. 

Agreement to Commit Civil Wrong 

An agreement will generally be illegal if it contemplates a civil 
wrong to a third person, though the wrong may not be an indictable v 
offense, and though the agreement may not amount to the crime of 
conspiracy. An agreement to divide the profits of a fraudulent 
scheme, or to carry out some object in itself lawful, by^ means of a 
trespass, breach of contract, or breach of trust, is unlawful and void. 
The acts contemplated, though not necessarily criminal, are con- 
trary to positive law.* 

Same — Frauds on Creditors 

Among the agreements void because they involve a civil wrong 
are agreements in fraud of creditors. Thus, in case of compositions 
with creditors, if in order to procure the consent of some particular 
creditor, or for any other reason, the debtor secretly promises him 
some advantage over the others, the agreement is void. In a com- 
position with creditors, "each creditor consents to lose part of hisr 

• Post, II. ua 

• Poplett T. Stockdale, 1 Ryan ft M. 837; Gale t. Leckie, 2 Starlde, 107. See 
''ContracU,'* Deo. Dig. {Key-^o.) % lOS; Cent. Dig. §( 468-476. 

T Allen V. RescouB, 2 Lev. 174. Bee ''Contract*;' Dee. Dig. {Key-No.) § IDS; 
Cent Dig. §§ 468-476. 

• Scott y. Bro^TQ [1892] 2 Q. B. 724 ; Begble ▼. Sewage Co., L. R. 10 Q. 
B. 491 ; Clement's Appeal, 52 Conn. 464 ; Allen ▼. Re^cous, 2 Lev. 174 ; Hatch 
v. Mann, 15 Wend. (N..Y.) 44; Davis v. Arledge. 3 HUl (S. C.) 170, 30 Am. 
Dec. 360 ; McCalVs Adm'r ▼. Capehart, 20 Ala. 521 ; Gleason y. Railroad Co. 
(Iowa) 43 N. W. 617; Woodstock Iron Co. v. Extension Co., 129 U. S. 643, 
9 Sup. Ct 402, 32 L. Ed. 819 ; Huckins t. Hunt, 138 Mass. 360 ; Gray y. Mc- 
Reynolds, 65 Iowa, 461, 21 N. W. 777, 54 Am. Rep. 16; Bloss y. Bloomer, 2a 
Barb. (N. Y.) 604; Thomas y. Caulkett, 67 Mich. 392, 24 N. W. 164, 58 Am. 
Rep. 369 ; Smith y. Humphreys, 88 Me. 345, 34 AtL 166 ; post, p. 860» note 78. 
Where A. pays B. for goods for C, intending that C. shall not haye to pay 
anything, ,and B. and C secretly agree for a further payment by C, the agree- 
ment is rold as a fraud on A. Jackson y. Duchaire, 3 Term R. 651. Perpe- 
tration of fraud on the public Mateme y.'Horwitz, 101 N. Y. 469, 6 N. E. 
831; Jerome y. Blgelow, 60 111. 452, 16 Am. Rep. 597. Contract for use of 
name of musical director for band with which he is not connected. Blakely 
y. Sonsa, 197 Pa. 335, 47 Atl. 28a See, also, Messer y. The Fadettes, 16S 
Mass. 140, 46 N. B. 407, 37 L. R. A. 721, 60 Am. St Rep. 371. See "Contracta,'" 
Dec, Dig. {Key-No.) f 109; Cent. Dig. |f 469, 48$. 






318 LEGALITY OF OBJECT (Ch. 8 

debt in consideration that the others do the same, and each creditor 
may be considered to stipulate with the others for a release from 
them to the debtor in consideration of the release by him. Whete 
any creditor, in fraud of the agreement to accept the composition, 
stipulates for a preference to himself, his stipulation is altogether 
void ; not only can he take no advantage from it, but he is also to 
lose the benefit of the composition." • A creditor who has not par- 
ticipated in the fraud may repudiate the composition and recover 
on the original claim.** 

Same — Fraud in Connection with Sales at Auction 

Where property is put up for sale at public auction, any agree- 
ment between the auctioneer or person having control of the sale 
and third persons by which fictitious bids are to be made, so as to 
raise the price, is a fraud on the purchaser,** and no rights can 
be based upon it A person, for instance, engaged to make ficti- 
tious bids, could not recover compensation promised him. We 
are here speaking of illegal agreements only, and therefore have 
nothing to do with the rights of the purchaser at an auction sale. 

, • Mullalien t. Hodgson, 16 Q. B. 689 ; Frost t. Gage, 3 Allen (Mass.) 560 ; 
Partridge ▼. Messer, 14 Gray (Mass.) 180; Ramsdell t. Edgarton, 8 Mete. 
(Mass.) 227, 41 Am. Dec 503; Clarke v. White, 12 Pet 178, L. Bd. 1046; 
Kullman v. Greenebaum, 92 Gal. 403, 28 Pac. 674, 127 Am. St Rep. 160; 
Cobleigh T. Pierce, 82 Vt 788; O'Shea ▼. OU Ca, 42 Mo. 397, 97 Am. Dec. 832; 
Way y. Langley, 15 Ohio St 392 ; Frieberg y. Treitschke, 36 Neb. 880, 55 N. 
W. 273; Hefter y. Oihn, 73 111. 296; Huckins y. Hunt 138 Mass. 366; Brown 
y. Neally, 161 Mass. 1, 36 N. B. 464; Powers Dry Goods Co. y. Harlin, 68 
Minn. 193, 71 N. W. 16^ 64 Am. St Rep. 460; Merritt y. Bucknam, 90 Me. 146, 
37 AtL 885. . It has been held, howeyer, in New York, that the seeret agree- 
ment only Is yoid, and that the preferred creditor may still haye the benefit 
of the composition agreement Hanoyer Nat Bank y. Blake, 142 N. Y. 406^ 
87 N. B. 519, 27 L. R. A. 33, 40 Am. St Rep. 607. See, also. White y. Kuntz, 
107 N. Y. 518, 14 N. B. 423, 1 Am. St Rep. 886 ; Cheyeront y. Textor, 53 Md. 
295. A secret agreement by a creditor to withdraw his opposition to a bank- 
rupt's discharge, or to a composition, is yoid ; and it does not matter whether 
it was made with the debtor or with a stranger, Higgins y. Pitt ^ Bz. 312; 
Kullman y. Greenebaum, supra ; nor whether the consideration for such with- 
drawal is to come out of the debtor's assets or not Hall y. Dyson, 17 Q. B. 
785 ; Kullman y. Greenebaum, supra ; and this is true though it be part of the 
agreement not to proye against the estate at all, McKewan y. Sanderson, 20 
Eq. 65. Bee **Contraot9," Dec, Dig. (Key-No.) ( 113; Cent. Dig. §9 521-523. 

lozell Guano Co. y. Emry, 113 N. C. 85, 18 S. B. 89; Kullman v. GrpAnfi - 
, baum, 92 ^CaJL 403, 28 Pac. 674, 27 Am. St Jlep. 150 ; Powers Dry Goods 
Co.'^v. Hariin, 68 Minn. 193, 71 N. W. 16, 64 Am. St Rep. 460. Bee "Con- 
tracts;' Dec. Dig. (Key-No.) § 113; Cent. Dig. §§ 521--525. 

11 Smith T. Greenlee, 13 N. C. 126, 18 Am. Dec. 564; Moncrieff y. Golds- 
borough, 4 Har. ft McH. (Md.) 281, 1 Am. Dec. 407; Chirtis y. Aspinwall, 114 
Mass. 187, 19 Am. Rep. 332 ; Peck y. Ust 23 W. Ya. 338, 48 Am. Rep. 398 ; 



§ 150) ▲GREEMBNTB IN VIOLATION OF POSiriVB LAW 319 

His contract is not illegal. He can avoid it,^* but this is because 
of the fraud, not because of any illegality. The illegality is in the 
agreement to commit the fraud. The sale is npt illegal, but merely 
voidable at the purchaser's option . 

In like manner agreements between persons for the purpose 
of deterring bidders and preventing competition at an auction sale 
are illegal as being a fraud on the owner, and the parties to such an 
agreement can claim no rights under it.** This rule, however, 
does not prevent parties from entering into a bona iide arrange- 
ment to purchase property at auction on their joint account, or 
for other proper purposes.** 

Same — Publication of Libel 

Since it is a civil wrong to publish a libelous book or article, 
even when it does not constitute a crime, an agreement contem- 
plating such a publication is illegal. No action will lie, there- 
fore, to recover compensation for printing or publishing a libelous 
book, or for breach of a contract^to print or publish it, or on an 
agreement to indemnify against liability for publishing it** In 

Pennock's Appeal, 14 Pa. 446, 63 Am. Dec. S61 ; Staines v. Shores 16 Pa. 200, 
55 Am. Dec. 492. See *'Contract9,** Dec. Diif. (Key-No.) f ItO; Cent. Dig. | SSJ^. 

IS Otherwise If the bidder, though employed by one Interested In the sale, 
can be compelled by the auctioneer to take the property. McMUlan ▼. Har- 
ris, 110 Ga. 72, 85 S. E. 834, 48 L. R. A. 845, 78 Am. St Rep. 03. Bee ''Con- 
tracts** Dee. Dig. (Key-No.) t ItO; Cent. Dig. § 65^. 

itGlbbs T. Smith, 115 Mass. 502; Ray t. Mackin, 100 111. 246; Doolln y. 
Ward, 6 Johns. (N. Y.) 194 ; Atcheson y. Mallon, 43 N. Y. 147, 8 Am. Rep. 
678 ; Barton y. Benson, 126 Pa. 431, 17 Atl. 642, 12 Am. St Rep. 883 ; Gardiner 
y. Morse, 25 Me. 140; Goldman y. Oppenhelm, 118 Ind. 95, 20 N. E. 635; 
Wooten y. Hlnkle, 20 Mo. 290; Atlas Nat Bank y. Holm, 71 Fed. 489, 19 G. 
a A. 94; De Baun y. Brand, 60 N. J. Law, 283, 37 Atl. 726; Hallam y. HnlT- 
man, 5 Kan. App. 803, 48 Pac 602; McClelland y. Bank, 60 Neb. 90, 82 N. 
W. 319. A contract made by a purchaser at a Judicial sale, before confirma- 
tion, to sell his bargain to another at an adyanced price. Lb illegal. Camp 
y. Bruce, 96 Ya. 521, 31 S. E. 901, 43 L. R. A. 146, 70 Am. St Rep. 873. Bee 
**Contract»,** Deo. Dig. (Key-No.) ( 119; Cent. Dig. |f 654-^58. 

i« Gibbs y. Smith, 115 Mass. 592; Smith y. Ulman, 58 Md. 188, 42 Am. Rep. 
829; Phlppen y. Stickney, 8 Mete (Mass.) 388; Garrett y. Moss, 20 111. 549; 
Marie*y. Garrison, 83 N. Y. 14; SmuU y. Jones, 1 Watts ft S. (Pa.) 128; Id., 
6 Watts & S. (Pa.) 122; Jenkins y. Frink, 30 Cal. 586,'^ Am. Dec. 134; < 
Kearney y. Taylor, 15 How. 494, 14 U Ed. 787; Wicker y. Hoppock, 6 Wall. 
94, 18 L. Ed. 752; Barnes y. Morrison, 97 Va. 872, 84 S. E. 93; Henderson 
y. Henrie, 61 W. Va. 183, 56 S. £. 369, 11 Ann. Cas. 741; Fidelity Ins. St 
Safe-Deposit Ck>. y. Railway Ca (Q C.) 98 Fed. 475 (agreement by bond- 
holders to purchase on foreclosure). A contract yiolating the state constitu- 
tion is yoid. San Antonio Irr. Co. y. Deutschmann, 102 Tex. 201, 105 S. W. 
486, 114 S. W. 1174. Bee '' Contract $,** Deo. Dig. (Key-No.) | 119; Cent. Dig. 
U 6SJh668. 

it ShackeU y. Rosier, 2 Ring. N. a 634 ; ATKINS y. JOHNSON, 43 Vt 78, 



320 LEGALITY OF OBJECT > (Ch. 8 

order to render such a contract illegal, "it should appear that there 
was an intention on the part of the author and publisher to write 
and publish libelous matter; or that the author proposed, with 
the knowledge and acquiescence of the publisher, to write libelous 
matter; or that the contract on its face provided for or promoted 
an illegal act" *• 

Same — Illegality Distinguished front Fraud 

Fraud is a civil wrong, ancj an ag^reement to commit a fraud 
is an a^eement to do an illegal a ct: but fraud as a civil wron g 
must be kept apart from fraud as a vitiating element in contrac t 
Fraud may vitiate a contract because it prevents the consent of 
the other from being genuine ; and in such case the contract can 
be avoided by the party defrauded, because his consent was unreal. 



SAME— AGREEMENTS IN BREACH OF STATUTE— CON- 
STITUTIONAL LAW 

15L The legisl ature, in the exercise of its police power, may rep - 
iilate or prohibit the making of contracts. 



«^h 



The United States, or a state, in the exercise of its police power, 
may regulate or prohibit the making of contracts where, in the 
judgment of the legislature, the public good requires the restric- 
tion, and ordinarily the courts will not review its judgment as 
to the propriety of the law. There is, however, some limitation 
to the police power. The federa l constitution protects th e vested 
ri ghts o f thj peo^lc^ jind .lIC.Qkil?iJs_con^ress and th e state legis - 
latures from passing any law which shall deprive a citize n of his 
liberty or property without due process of law. The courts are 
bound to enTorce the constitution even as against the legislatures ; 
and if the legislature, assuming to act under the police power of 
the state, should pass a statute depriving a person of the right 
to make contracts, where the public good clearly does not require 
such interference, the statute would be unconstitutional and void.*^ 

5 Am. Rep. 2G0, Throckmorton Cas. Contracts, 219 ; Arnold t. Clifford, 2 Sumn. 
238, Fed. Cas. No. 555; Ives ▼. Jones, 25 N. C. 538, 40 Am. Dec 421; Clay v. 
Yates, 1 Hurl. & N. 73. Bee *' Contract 8,*' Dec, Dig, {Key-No.) ( lOS; Cent, Dig, 

!• Jewett Pub. Co. t. BuUer, 159 Mass. 517, 84 N. K 1087. Bee **Oontract9,'* 
Dec. Dig. (Key-No.) % 103; Cent. Dig. § ^74. 

IT Allgeyer ▼. Louisiana, 165 U. S. 578, 17 Sup. Ct 427, 41 L. Ed. 832; Hol- 
den T. Hardy, 169 U. S. 366, 18 Sup. Ct 383, 42 L. Ed. 780; People t. Coler, 
166 N. Y. 1, 69 N. E. 716, 52 L. R. A. 814, 82 Am. St Rep. 605; People ▼. 
Olllson, 109 N. T. 389, 17 N. E. 843, 4 Am. St Rep. 466 ; In ib Jacobs. 08 N. 



( 152) AGREEMENTS IN yiOl4ATION OF POSITITB LAW 321 

A discussion of the police power and of its limitations, however, 
in its bearings upon the power of the legislature in this regard, 
is beyond the scope of this book. 



SAME— PROHIBITION BY STATUTE 

152. In determining whether a contract, or an act or omission n 
involved in the performance of a contract, is prohibited yj 
by statute, th^ intention of a legislature must be ascer- yl4LC/ 
tained, and must govern; and in ascertaining the inten- 
tion the court will look to the language and subject-mat- 
ter of the statute, and the evil which it seeks to prevent. 
Subject to this fundamental rule, the following rules of 
construction, Which are frequently applied, may be stated: 
(a) Where the s tatute i mposes a pe nalty for an act or omi ssion. \ 
this is prima facie evidence of intention t o pro hibit. / 

(b) If the object cA t ^^e p#>na1ty is prnff^rrinn of the J)ublic, Jt *^t^^ , 

amounts to a proh ibi tion ; but if the o bject is solely fpr J 

revenue purposes, the act or omission is not prohibited. /I < t 

— _ . -- - 



Where it is contended that an agreement is illegal as being in 
violation of a statute, the question is whether the acts contem- 
plated are prohibited by the statute ; and the answer to this ques- 
tion depends upon the construction of the statute. In all cases 
th ^ inteqtion of t ^^f l^gigl^tyrp must govern.^* If a statute was 
intended to prohibit a particular agreement, or the acts involved 
in its performance, then that agreement is clearly illegal. 

The law does not make any distinction between acts which 
are mala in se, and which for this reason are' prohibited by stat- 
ute, and acts which are mala prohibita, or wrong merely because 
they are prohibited by statute. If the statute prohibits an act, 
an agreement involving its commission is illegal, without regard 

T. 98, 60 Am. Rep. 636; People y. Marx, 99 N. Y. 377, 2 N. E. 29, 52 Am. 
Rep. 34 ; State ▼. Scougal, 3 S. D. 55, 51 N. W. 858, 15 L. R. A. 477, 44 Am. 
St. Rep. 756; Godcharies ▼. Wigeman, 113 Pa. 431, 6 Atl. 854. Bee **ConatitU' 
tional Law,** Dec. Dig, (Key-No.) | B76; Cent Dig. %% 81,5, 846. 
. !• Cope T. Rowlands, 2 Mees. & W. 149; MUler ▼. Ammon, 145 U. S. 421, 12 
Sup. Gt 884, 86 L. Ed. 759 ; Bowditch ▼. Insurance Co., 141 Mass. 292, 4 N. 
E. 798, 55 Am. Rep. 474; Aiken ▼. Blalsdell, 41 Vt 655; Griffith ▼. Wells, 3 
Denio (N. Y.) 226; Harris v. Runnels, 12 How. 79, 18 L. Bd. 901; Pangbom 
T. Westlake, 36 Iowa, 546; Dillon v. Allen, 46 Iowa, 299, 26 Am. Rep. 145; 
Lester v. Bank, 33 Md. 558, 3 Am. Rep. 211 ; Ruckman t. Berghols, 37 N. J. 
Law, 487; McKeever v. Beacom, 101 Iowa, 178, 70 N. W. 112. 8e0 **Ctmr 
lrocf«," Dec. Dig. (Key-No.) 1 105; Cent. Dig. §§ ^78-497. 

Olabk Cont.CSd Ed.) — ^21 



T 



322 LEGALITY OF OBJECT (Ch. 8 

to the ground of prohibition, or the morality or immorality of the 
act." 

Prohibition — Effect of Penalty 

A statute may render an agreement illegal by express prohibition 
or by imposing a penalty without an express prohibition. Where 
the statute expressly provides that a violation thereof shall con- 
stitute a misdemeanor, a contract in violation of it is illegal, 
although the statute does not in express terms prohibit the con- 
tract nor declare it void.** 

Some cases hold that, whenever a s ta tute im poses a penal ty 
f or an act or omissiqiij^itim^liedly^ prohibits it;Ji but, accordin g 
t p the weight of author ity^ the impositi on of a jpen altv is on ly 
prima facie evid ence of an intention to prohibit.** The inten- 
tion of the legislature will always govern, and the court will look 
to the language and subject-matter of the act and to the evil 
which it seeks to prevent. A consideration which receives weight 
is whether the object of the penalty is protection to the public 
and not merely revenue; for if the penalty is designed to further 
the interests of public policy, as to protect the public against 
fraud or imposition, or to protect health or morals, safety or good 

i»Bank of U. S. y. Owens, 2 Pet 527, 639, 7 L^ Ed. 608; Bensley y. Big- 
ttold, 6 Bam. ft Aid. 835 ; Aubert ▼. Mafee, 2 Bos. & P. 371 ; White y Buss, 8 
Cush. (Mass.) 448; Puckett y Alexander, 102 N. C. 95, 8 S. E. 767, SURA. 
43; Penn ▼. Bornman, 102 111. 523; Lewis y Welch, 14 N. H. 294; William 
Wilcox Mfg. Co. V. Brazos, 74 Conn. 208, 50 Atl. 722. See **Contracts,'* Dee. 
Dig. {KeV'No.) § 105; Cent, Dig, |§ ^78-^7. 

so pinney v. First Nat. Bank, 68 Kan. 223, 75 Pac. 119, 1 Ann. Caa. 831 ; 
Smith y. Robertson, 106 Ky. 472, 50 S. W. 852, 45 L. R. A. 510; Beecher y. 
Pern Trust Co., 49 Ind. App. 184, 97 N. E 23. And see Leuthold y Stickney, 
116 Minn. 299, 133 N. W. 856, 39 L. R. A. (N. S.) 231, Ann. Ca& 1913B, 405 
(holding that the owner of a building who is guilty of a misdemeanor in fail- 
ing to equip it with fire escapes as required by statute cannot maintain an 
action for the rent thereof). Bee **Contracts,** Dee. Dig. {Key-No.) | 107; 
Cent, Dig, § 479. 

21 Miller v. Post, 1 Allen (Mass.) 434; Hallett v. Novion, 14 Johns. (N. Y.) 
273, 290; Pray y Burbank, 10 N. H. 377; Doe r. Burnham, 31 N. H. 426; 
Durgin v. Dyer, 68 Me. 143; Kleckley y Leyden, 63 Ga. 215; McConnell v. 
Kitchens, 20 S. C. 430, 47 Am. Rep. 845; Bacon ▼. Lee, 4 Iowa, 490; Randall 
▼. Tuell, 89 Me. 443, 36 Atl. 910, 38 L. R. A. 143 ; Sandag« v. Manufacturing 
Co., 142 Ind. 148, 41 N. E 380, 34 L. R. A. 3(», 51 Am. St Rep. 165; Edgerly 
V. Hale, 71 N. H. 138, 51 AtL 679. See "Contracts;* Dee. Dig, (Key-No.) 1 107; 
Cent, Dig. f 479. 

s 2 Bensley ▼. Bignold, 6 Bam. ft Aid. 335; Cope v. Rowlands, 2 Mees. & 
W. 149; Griffith v. Wells, 8 Denio (N. Y.) 220; Hunt y Knickerbacker, 6 
Johns. (N. Y.) 327; President, etc., of Springfield Bank v. Merrick, 14 Mass. 
322; Sledenbender ▼. Charles* Adm'rs, 4 Serg. ft R. (Pa.) 151, 8 Am. Dec. 
682; Penn y Bornman, 102 111. 523. See, also, cases in note 18, supra. See 
"Contracts,** Dec. Dig. {Key-No.) f 107; Cent. Dig. § 479. 



g 152) AOBBEMENTB IN VIOUkTION OF POSITIVE IiAW 823 

order, it amounts to a prohibition ; *• but if it is design ed solely Z? 
for revenue purposes, a contra ct in viol ation of the statu te is no t V' ^ V 
necessarily prohibited.* * The propriety of applying a different ^, 

rule to statutes designed for revenue purposes, however, has been 
questioned.** Another consideration, which sometimes receives 
weight, is whether the penalty is recurrent upon every breach 
of the provisions of the statute; for, if it is recurrent, the infer- 
ence is that the penalty amounts to a prohibition.** 

The absence of a penalty or the failure of the penal clause in 
the particular instance will not prevent the court from giving 
effect to an express prohibition.*^ 

Doing Indirectly What Cannot be Done Directly 

What the law forbids to be done directly cannot be made law- 
ful by doing it indirectly.** Where a bank, for instance, which 
was itself prohibited from entering into a particular transaction, 
procured its manager to appear in the transaction for its benefit, * 
it was held tha^the transaction .was unlawful, "upon the pxindck ' 
th at whatever is p rohibited by law to b e do ne d irectly cannot 
legally be effected by an indirect and ci rcuitous contrivance."** 

2>Cope ▼. Rowlands, 2 Mees. A W. 149; Candell ▼. Dawson, 4 O. B. 376; 
Griffith y. Wells, 3 Denlo (N. Y.) 226; Seldenbender t. Charles* Adm'rs, 4 
Serg. & R. (Pa.) 151, 8 Am. Dec. 682; Penn y. Bomman, 102 III. 523; Bisbee 
y. McAUen, 39 Minn. 143, 39 K. W. 299 ; Smith y. Robertson (Ky.) 50 S. W. 
852, '45 L. R. A. 510; Victorian Daylesford Syndicate y. Dott, 74 Law J. Ch. 
673, [1906] 2 Oh. 624, 93 Law T. 627, 21 Times Law B. 742. See "Contracte,'' 
Dec. Dig. (Key-No.) | 107; Cent. Dig. § ^79. 

t4 Brown y. Duncan, 10 Bam. ft O. 93 ; Lamed y. Andrews, 106 Mass. 435, 
8 Am. Rep. 346; Coming y. Abbott, 54 N. H. 469; Aiken y. Blaiadell, 41 Vt 
655 ; Ruckman y. Bergholz, 37 N. J. Law, 437 ; Rahter y. First Nat Bank, 92 
Pa. 393 ; Mandlebaum y. Gregoyich, 17 Ney. 87, 28 Pac. 121, 45 Am. Rep. 433 ; 
Vermont Loan & Trust Co. y. Hoffman, 5 Idaho, 376, 49 Pac. 314, 37 L. R. A. 
509, 95 Am. St Rep. 18a See **Oontraot»,** Deo. Dig. (Key-No.) ( 101; Cent. 
Dig. % il9. 

s«See Cope y. Rowlands, 2 Mees. & W. 149; Territt v. Bartlett, 21 Vt 
184; Aiken y. Blaisdell, 41 Vt 655. See "Contract;** Deo. Dig. (Key-No.) § 
107; Cent. Dig. § 4^9. 

2« Ritchie y. Smith, 6 C. B. 462; Anson, Cont (8th Ed.) 185; Smith y. 
Robertson, 106 Ky. 472, 50 S. W. 852, 45 L. R. A. 510. See '^Contract*;* Dec, 
Dig. (Key-No.) % 107; Cent. Dig. % 479. 

srPol. Cont (3d Ed.) 271; Sussex Peerage Ckise, 11 Cnark & F. 148, 149. 
See, also. Union Nat Bank y. Louisyille, N. A. & C. Ry. Co., 145 III. 208^ 34 
N. B. 135; Johnson y. Berry, 20 S. D. 133, 104 N. W. 1114, 1 L. R. A. (N. S.) 
1159. See **Contracti,** Deo. Dig. (Key-No.) %,106; Cent. Dig. % 477. 

se Booth y. Bank of England, 7 Clark ft F. 509, 540; Bank of U. S. y. 
Owens, 2 Pet 527, 536, 7 L. Ed. 508 ; Wells y. People, 71 IlL 532. See ''Con- 
trocte:* Deo. Dig. (Key-No.) t 105; Cent. Dig. %% 468-497. 

2» Booth y. Bank of England, supnu Bee ''Contracti,** Dec. Dig. (Ay-No.) | 
105; Cent. Dig. |§ 46S-497. 



324 LEGALITY OP OBJECT (Ch. 8 

So, where the charter of a bank forbade the taking of a greater 
rate of interest than 6 per cent., but did not say that an agreement 
should be void in which such interest was taken, the supreme 
court of the United States held that a transaction by which the 
bank discounted a note at more than 6 per cent, was void, though 
the charter did not expressly prohibit an "agreement" to take 
higher interest, but spoke only of "taking," not of "reserving," 
interest. The court said: ''A fraud upon a statute is a violation 
of the statute. * * ♦ It cannot be permitted by law to stip- 
ulate for the reservation of that which it is not permitted to re- 
ceive. In those instances in which courts are called upon to 
inflict a penalty ♦ * * it is necessarily otherwise; for then 
the actual receipt is generally necessary to consummate the of- 
fense; but, when the restrictive policy of a law alone is in con- 
templation, we hold it to be ah universal rule that it is unlawful 
to contract to do that which it is unlawful to do." •* 

Same — Agreements Prohibited but Declared Not Void 

An agreement forbidden by statute may be saved from being 
void by the statute itself. Wh ere a s tatut e forbids an agre emen t, 
but say;s_that, if m ade, it shall not be void, then, if made, it i s 
a contract which the_courts jnust enforce^'^ 

Same — Agreements dimply Void and Unenforceable 

Where no penalty is imposed, and the intention of the legisla- 
ture appears to be simply that the agreement is not to be enforced, 
neither the agreement itself nor its performance is to be treated 
as unlawful for any other^purposc.** 



SAME— PARTICULAR AGREEMENTS IN BREACH OF 

STATUTE 

153. Among the statutes prohibiting agreements, the following 
may be mentioned as the most important: 

(a) Statutes regulating the conduct of a particular trade, busi- 

ness, or profession, or regulating dealings in particular 
articles of commerce. 

(b) Statutes regulating the traffic in intoxicating liquors. 

(c) Statutes prohibiting labor, business, etc., on Sunday. 

ae Bank of U. S. ▼. Owens, 2 Pet 527, 7 L. Ed. 50& See **Oontract9,** Dee, 
Dig, (Key-No.) | 105; Cent. Dig, i§ 4«M57. 

•1 Lewis V. Bright, 4 El. & BL 917, Bee "Contracts,"' Dec. Dig. {Key^No.) 
I 105; Cent. Dig. i§ 468-497. 

»2 Post, p. 419. 



§ 153) AOBEEMEinS IN VIOLATION OF POSITIVE LAW 325 

(d) Statutes prohibiting the taking of usury. 
' (e) Statutes prohibiting gaming and wagers. This head in- 
cludes statutes prohibiting the buying and selling oi stock? 
or commodities for future delivery, where the parties 
intend^ not an actual delivery, but a settlement by paying 
the difference between the market and the contract price.** 

(f) Statutes prohibiting lotteries. 

Regulating Trade, Profession, or Business 

There are numerous statutes in all of the states, enacted for the 
purpose of protecting the public in dealing with certain classes of 
traders or professional men, and with certain articles of copimerce. 
Protection to the public is generally the object of these statutes, 
and they are construed as prohibiting contracts entered into with- 
out paving complied with the prescribed conditions. As falling 
within this class may be mentioned statutes imposing a penalty on 
dealers who fail to have the weights, measures, or scales used by 
them approved and sealed by the proper officer. Sucha^^tatute 
i s for the pro tection of the public against fraud and imposition, and 
amounts to a p rohibition of sales in measures or by weights or 
s cales not sealed 7"so that a^ dealer who has made such a sale can- 
n o^ recover the price.* * 

Falli ng within this cla ss are also statutes, requiring professional 
men, such as la wyers^ physicians and^surgeons, and others, to pro- 
cure a lic ense, c ertificate, or diploma as a condition precedent to 
t he njght to e ngage in the practice of their profession. These stat- 
utes are intended to protect the public against incompetent and 
unqualified practitioners, and a person coming within the statute 
cannot recover for his services if he has not complied with its pro- 
visions.** 

'^ ti Independently of statute, wagers on subjects in which the parties have 
/ no interest are, in this country, generally held illegal, as being contrary to 
Vf nblic policy. Post, p. 842. 

s« Miller v. Post, 1 Allen (Mass.) 484; Blsbee v. McAUen, 39 Minn. 143, 
89 N. W. 299; Finch v. Barclay, 87 Ga. 393, 13 S. E. 566; Eaton ▼. Kegan, 
114 Mass. 433. See "Contracts,'* Dec. Dig. (Key-No,) t 105; Cent. Dig. | J^l. 
•« Lawyers. Hall ▼. Bishop, 3 Daly (N. Y.) 109; Ames ▼. Gilman, 10 Mete. 
(Mass.) 239 ; Hittson v. Brown, 3 Colo. 804. But see Yates ▼. Robertson, 80 
Va. 475; Harland y. Lilienthal, 53 N. Y. 43S. Physicians and surgeons. 
BaUey ▼. Mogg, 4 Denio (N. Y.) 60; Alcott v. Barber, 1 Wend. (N. Y.) 526; 
Orr V. Meek, 111 Ind, 40, 11 N. E. 787 ; Ooyle ▼. Campbell, 10 Ga. 570 ; Puck- 
ett V. Alexander, 102 N. C. 95, 8 S. E. 767, 3 L. R. A. 43 ; Davidson ▼. Bohl- 
man, 37 Mo. App. 576; Richardson v. Dorman, 28 Ala. 679; Jordan ▼. Dayton, 
4 Ohio, 295; Underwood ▼. Scott, 43 Kan. 714, 23 Pac. 942; Holmes ▼. Halde, 
74 Me. 28, 43 Am. Rep. 567; Dow ▼. Haley, 30 N. J. Law, 354; Adams ▼. 
Stewart, 5 Har. (Del.) 144; Hawx>rth y. Montgomery, 91 Tena 16, 18 S. W. 




326 LBOALITT OF OBJBCT (Ch. 8 

There are also, in most of the states, statutes regulating dealings 
with certain articles of commerce. They arc designed either for 
the protection of the public against fraud or imposition from the 
sale of a spurious article, or for the protection of the public health 
against adulterated articles of food, or dangerous substances, such 
as powder and poisons.** §ales__qf fe rtilizers^ for instance, have 
been held illegal where the article was not inspected or labeled a s 
required by statute. '^ 

In many of the states there are statutes prohibiting the employ- 
ment of young children in factories, and a contract for such employ- 
ment would be illegal, so that a father could not recover for the 
services of a child so employed.** 

But if a statute imposing a penalty for engaging in business 
without a license is enacted, not for the protection of the public, 
but for the purpose of raising revenue, it does not render void con- 
tracts made in violation thereof.** 

899; Hargan ▼. Purdy, 98 Ky. 424, 20 S. W. 432; Roberts t. Levy (Gal.) 81 
Pac. 570. Unlicensed real estate broker. Buckley y. Humason, 50 Minn. 195, 
52 N. W. 885, 16 U R. A. 423, 86 Am. St Rep. 687; Johnson v. Hullngs, 103 
Pa. 498, 49 Am. Rep. 181; Stevenson ▼. Ewing, 87 Tenn. 46, 9 S. W. 230. 
Unlicensed stockbroker. Cope ▼. Rowlands, 2 Mees. & W. 149; Hustls v. 
Plckards, 27 lU. App. 270. School teacher without certiflcate. Ryan t. School 
Dlst, 27 Minn. 438, 8 N. W. 146; Wells y. People, 71 III. 53Z UnquaUfled 
conyeyancer. Taylor y. Gas Co., 10 Exch. 293. Unlicensed plumber. John^ 
ston y. Dahlgren, 81 App. Dly. 204, 52 N. Y. Supp. 555. Innkeeper. Randall 
y. Tuell, 89 Me. 443, 86 Atl. 910, 88 L. R. A. 143. Keeper of stallion. Smith 
y. Robertson, 106 Ky. 472, 50 S. W. 852; Nelson y. Beck, 89 Me. 264, 86 Atl. 
874. See **Attomey and CUent," Dee, Dig, (Key-No.) § 136; Cent, Dig. § 298; 
"Physician* and Surgeons,** Dec. Dig. {Key-No.) § Z2; Cent. Dig. t 61; **Bro- 
ken," Deo, Dig. (Key-No.) i 42; Cent. Dig. § 43. 

*• Sale of oleomargarine. Waterbury y. Egan, 8 Misc. Rep. 855, 23 N. Y. 
Supp. 115; Braun y. Keally, 146 Pa. 519, 23 AtL 889, 28 Am. St Rep. 811. 
Sales by unregistered pharmacist in charge of drug store in ylolatlon of stat- 
ute. Shattuck y. Watson, 164 Mich. 167, 129 N. W. 196. See '* Contracts,** 
Deo. Dig. (Key-No.) § lOS; Cent. Dig. M 468^91. 

tT McOonnell y. Kitchens, 20 S. C. 430, 47 Am. Rep. 845 ; Conley y. Sims, 71 
6a. 161; Johnston y. McGonnell, 65 Oa. 129; Baker y. Burton (C. C.) 81 Fed. 
401; Williams y. Barfleld (G. C.) 81 Fed. 898; Campbell y. Segars, 81 Ala. 
259, 1 South. 714; VANMETER ^y. SPURRIER, 94 Ky. 22, 21 S. W. 337, 
Throckmorton Gas. Contracts, 222. Gontra, Nlemeyer y. Wright, 75 Va. 239, 
40 Am. Rep. 720. See '^Contracts** Deo. Dig. (Key-No.) | 105; Cent. Dig, §| 
468-497. 

«> Blrkett y. Ghatterton, 13 R. I. 299, 43 Am. Rep. 80. Under eight-hour 
law, making ylolatlon of act a misdemeanor, an employ^ cannot recoyer for 
overtime. Short y. Mining Go., 20 Utah, 20, 57 Pac. 720, 45 L. R. A. 603. See 
^'Contracts,** Dec. Dig. (Key-No.) | 105; Cent. Dig. U 468-497. 

»• Sunflower Lumber Go. y. Turner Supply Go., 158 Ala. 191, 48 South. 510, 
132 Am. St Rep. 20 [dt Glark on Gontracto (1st Ed.) 885]. See "Contracts," 
Dec' Dig. (Key-No.) § 106; Cent. Dig. § 477. 



§ 153) AQREBMITNTS IN VIOLATION OF POSmTB LAW 327 

Further illustrations of statutes within this class are referred to 
below.** 

Same — Traffic in Intoxicating Liquors ** 

Where a statute in terms prohibits the sale of intoxicating liq- 
uors, a contract of sale is of course invalid. Some difficulty has 
arisen where the statute was not absolutely prohibitory, but mere- 
ly prescribed certain conditions to be complied with by dealers. 
An example is where a statute imposes a penalty for selling with- 
out a license. It is generally held that such a statute is not mere- 
ly for purposes of revenue, but is to diminish the evils of intem- 
perance, and prevent disreputable and objectionable persons from 
engaging in the business, and that sales without a license are pro- 
hibited and rendered illegal.*' 

Somewhat in line with these statutes are those which regulate 
the conduct of saloons, such as statutes prohibiting billiard tables, 
bowling alleys, etc., in connection with a saloon. An agreement 
in breach of such a statute is illegal. A carpen ter, for instance, 
cann ot recover th e £ri^ejof .greeting a bowling allej^ in ajDuildjng 
appurtenant to a tavern, w here A .i»i?t2L^?. prohibits it froni being 

So, also, under a statute imposing a penalty on any person own- 
ing or controlling any premises who shall suffer t^iem to be used 
for the sale of spirituous liquors, a person who owns a building, 
and has knowledge that his tenant at will is using the premises 

40 Loan by pawnbroker who has neglected to comply with statute. Fer- 
gusson y. Norman, 5 Bing. N. C. 76. •Failure of printer to print his name on 
the work as required by statute. Bensley ▼. Blgnold, 5 Barn. & Aid. 335. 
Unlicensed peddlers. Stewartson v. Lothrop, 12 Gray (Mass.) 52. Agreement 
to construct building not complying with building regulations. Stevens v. 
Gourley, 7 C. B. (N, S.) 99; Burger v. Koelsch, 77 Hun, 44, 28 N. Y. Supp. 
460. Failure to measure wood sold, as required by statute. Pray ▼. Burbank, 
10 N. H. 377. Agreement for threshing grain, where machine is not boxed 
as required by a statute. Intended to prevent Injury to workmen. Dillon v. 
Allen, 46 Iowa, 299, 26 Am. Rep. 145. Sale of shingles not of size prescribed. 
Wheeler v. Russell, 17 Mass. 258. Bee "Contracts," Deo. Dig. (Key-No.) i 105; 
Cent. Dig. %% 468-497- 

«i On this subject, see Black, Intoz. Liq. §§ 242~27a 

*t Griffith V. Wells. 3 Denlo (N. Y.) 226 ; Territt v. Bartlett, 21 Vt 184 ; 
Aiken v. Blaisdell, 41 Vt 655; O'Bryan ▼. Fltzpatrick, 48 Ark. 487, 3 S. W. 
627; Yannoy v. Patton, 6 B. Mon. (Ky.) 248; Solomon y. Dreschler, 4 Minn. 
278 (GIL 197) ; Lewis v. Welch. 14 N. H. 294 ; Cobb v. BllUngs, 23 Me. 470 ; 
Melcholr r. McCarty, 31 Wis. 252. 11 Am. Rep. 605 ; Bach ▼. Smith, 2 Wash. 
T. 145, 3 Pac. 831. See **Intowicating Liquors;* Dec. Dig. (Key-No.) §{ J£7- 
330; Cent. Dig. S§ 467-485. 

«• Spurgeon v. McElwaln, 6 Ohio, 442, 27 Am. Dec. 266. See **ContTact9;* 
Deo. Dig. (Key-No.) i 105; Cent. Dig. U ^^^^7. 



328 LEGALITY OF OBJECT (Ch. 8 

for the sale of spirituous liquors, and who permits him to continue 
in possession, cannot recover for use and occupation/^ 

Contracts in Breach of Sunday Laws 

T he com mon law does not prohibit the making of co ntracts on 
Sunday^ andj^ in the absence of statutory prohi bition, such con- 
tracts are as valid as if made on any other day.** In most states, 
hovv^v^er", statutes have been enacted on the subject.** 

Where the statute €pcpressly prohibits the making of contracts 

on Sunday, and declares that they shall be void, there should be 

. no difficulty in applying it ; *^ and, if a statute prohibits servile work 

and labor on Sunday, there can of course be no recovery for such 

work.** 

Where it is provided that no person shall do any labor, work, or 
business on Sunday, all sec ular business is prohibited- Not only 
would a contract to do work on Sunday, made on some other day, 
be illegal because of the object,** but a contract made on Sunday 
to work on another day would be likewise prohibited. Xtn^LBiaJf- 
] ing of a contract is secular business, within the .Tn^^DJPg of tfa e 

hfCZy statute.** But where the prohibition is only against servile work 

44 Mitchell r. Scott, 62 N. H. 506; post, p. ili. Bee **Oontraet9," Dec. Dig, 
{Key-N'o,) f 105; Cent. Dig. §§ ^58-457. 

4B Story V. Elliott, 8 Cow. (N. Y.) 27, 18 Am. Dec 423 ; Sayles v. Smith. 
12 Wend. (N. Y.) 57, 27 Am. Dec. 117; Richmond v. Moore, 107 111. 429, 4T 
Am. Rep. 445; Bloom y. Richards, 2 Ohio St 387; Swann y. Swann (C. G.) 
21 Fed. 299; Adams y. Gay, 19 Vt 358; Brown y. Browning, 15 R. I. 422, < 7 
Atl. 403, 2 Am. St Rep. 908. Bee "Bunday,*' Dec Dig. {Key-No.) | 11; Cent. 
Dig. If 30-^4- 

«« Sunday laws are not an unconstitutional interference with the religious 
liberty of the people. State y. O'Rourk, 35 Neb. 614, 53 N. W. 591. 17 L. R. A. 
830; State y. Judge, 39 La. Ann. 132, 1 South. 437; Scales y. State, 47 Ark. 
476, 1 S. W. 769, 58 Am. Rep. 768 ; Petit y. Minnesota, 177 U. S. 164, 20 Sup. 
Gt 666, 44 L. Ed. 716; Hennington y. State, 163 U. S. 299, 16 Sup. Gt 1086, 
41 li. Ed. 166 ; State y. Powell, 58 Ohio St 324, 50 N. B. 900, 41 L. B. A. 854. 
See "Sunday,"' Dec. Dig. (Key-No.) { 11; Cent. Dig. {{ 30-34. 

«T Bums y. Moore, 76 Ala. 339, 52 Am. Rep. 332. In Maine, and probably in 
some of the other states, the statute provides that the defense that a con- 
tract was executed oil Sunday cannot be made to an action thereon unless 
the consideration is returned. Wentworth y. Woodside. 79 Me. 156, 8 Atl. 
763 ; First Nat Bank y. Kingsley, 84 Me. Ill, 24 Atl. 794 ; Wheelden v. Ly- 
ford, 84 Me. 114, 24 AtL 793. See ''Sunday," Dec. Dig. (Key-No.) § 11; Cent. 
Dig. §1 30-^4. 

48 Watts V. Van Ness, 1 Hill (N. Y.) 7a Bee ''Sunday," Deo. Dig. (Key-No.) 
I 11 ; Cent. Dig. §f 30-34. 

«• HANDY v. ST. PAUL GLOBE PUB. GO., 41 Minn. 188, 42 N. W. 872, 
4 L. R. A. 466^ 16 Am. St Rep. 695, Throckmorton Gas. Gontracts, 227. See 
"Sunday," Dec. Dig. (Key-No.) f 11; Cent. Dig. fif 30-34. 

•0 Northrop v. Foot, 14 Wend. (N. Y.) 248; Pattee v. Greely, IS Mete 
(Mass.) 284; Towle y. Larrabee, 28 Me. 464; Lyon y. Strong, 6 Vt 219; Var- 



g 153) AGREEMENTS IN VIOLATION OF POSITIVE LAW S29 

and labor, the making of contracts, including the execution of com- 
mercial paper, is not generally regarded as included."^ Again, if 
the prohibition is confined to labor, business, or work of a nian's 
"ordinary calling," contracts or other business or work on Sunday 
by a person is not illegal unless it is within his ordinary calling." 
A real-estate broker or lawyer, therefore, would not violate the stat- 
ute by purchasing or selling a horse on Sunday. If the statute prp- 
h ibits the expos ure of merchandise for sale on Sunday, the prohibi- 
tion extends only to public sales, and does not prevent private con- 
tracts of sale without suc h expo sure^" 

Same — Works of Necessity or Charity 

In all of the states the statutes expressly except from the prohi- 
bition works of necessity or charity, but as to what constitutes 
a work of necessity or charity the authorities ar^ somewhat con- 

ney v. French, 19 N. H. 233; Nibert v. Baghnret, 47 N. J. Eq. 201, 20 Ap. 
252; I^ (N. J.) 25 AtL 474; Calhoun t. PhUUps, 87 Ga. 482, 18 S. B. 503; 
Qoss V. Whitney, 27 Vt 272; Kepner y. Keefer, 6 Watts (Pa.) 231, 31 Am. 
Dec. 460; Smith v. Railway Ck)^ 83 Wis. 271, 50 N. W. 497, 53 N. W. 550; 
Brazee v. Bryant, 50 Mich. 136, 15 N. W. 49 ; Durant y. Rhener, 26 Minn. 362, 
4 N. W. 610. A notice to a tenant Gannon ▼. Ryan, 49 N. J. Law, 314, 8 
Atl. 293. Indorsement of note. First Nat Bank y. Klngsley, 84 Me. Ill, 24 
Atl. 794. Selling of soda water by a druggist is "wx)rldly employment" 
Splane y. Commonwealth (Pa.) 12 Atl. 431. Extension of time of payment of 
debt Rush y. Rnsh (N. J. Ch.) 18 Atl. 221. CSasaal execution of note Is not 
••labor." Holden y. O'Brien, 86 Minn. 297, 90 N. W. 531. Bet **8unday,** Dec. 
Dig. (Key-No.) { IS; Cent. Dig. || SS-^. 

Bi Blrks y. French, 21 Kan. 238; Richmond y. Moore, 107 111. 429, 47 Am. 
Rep. 445; Boynton y. Page, 13 Wend. (N. Y.) 425. Contra, Reynolds y. Ste- 
yenson, 4 Ind. 619 ; Link y. (^emmens, 7 Blaclcf. (Ind.) 479. Sale of tickets 
by manager of theater, and superintending Sunday performance, is "labor- 
ing." Qnarles y. State, 55 Ark. 10, 17 S. W. 269, 14 L. R. A. 192. Running 
excursion steamboat is "worldly employment" Commonwealth y. Rees, 10 
Pa. Co. Ct R. 545. Acknowledgment of debt barred by statute of limitations. 
Thomas y. Hunter, 29 Md. 406. Athletic games and sports are not within 
the prohibition against labor. St Louis Agr. & Mech. Ass'n y. Delano, 37 
Mo. App. 284; Id.. 108 Mo. 217, 18 S. W. 1101. See "Sunday,'* Dec. Dig. 
(Key-No.) til; Cent. Dig. H SO-SJ^, 

Bs Hazard y. bay, 14 Allen (Mass.) 487, 92 Am. Dec. 790 (construing the 
Rhode Island statute) ; Allen y. Gardner, 7 R. I. 22 ; Amis y. Kyle, 2 Yerg. 
(Tenn.) 31, 24 Am. Dec. 463; Sanders y. Johnson, 29 6a. 526; Mills y. Wil- 
liams, 16 S. C. 593 ; Hellams y. Abercromble, 15 S. C. 110, 40 Am. Rep. 684 ; 
Swann y. Swann (C. C.) 21 Fed. 299. See "Sunday,** Deo. Dig. (Key-No.) | 
11; Cent. Dig. U SO-SJ^- 

ft* Boynton y. Page, 13 Wend. (N. T.) 425; Batsford y. Byery, 44 Barb. (N. 
Y.) 618. See, also, Ward y. Ward, 75 Minn. 269, 77 N. W. 965. But public 
exposure and sale of newspapers is within the statute. Smith y. Wilcox, 24 
N. Y. 353, 82 Am. Dec. 302. The statute also applies to slot machines auto- 
matically vending wares. Cain y. Daly, 74 S. C. 480, 65 S. S. 110. Bee 
"Sunday;* Deo. Dig. (Key-No.) | 11; Cent. Dig. fi $0-34. 



330 LEGALITY OF OBJECT (Ch. 8 

ilicting. As a rule, whatever must be done in order to preserve 
4ife or health •* or property/' and must be done on Sunday if done 
at all, is a work of necessity.'* If property is in imminent danger, 

B« Smith y. Watson, 14 Vt 382; Aldrlch t. Blackstone, 128 Mass. 14& See 
"Sunday," Deo. Dig. (Key-No.) { 7; Cent. Dig. f{ lk-20. 

Bs Johnson v. People, 42 lU. App. 594 (reaping field of grain) ; Whitcomb 
V, Gilman, 35 Vt 207; Parmelee v. Wilks, 22 Barb. (N. Y.) 539; State v. 
McBee, 52 W. Va. 257, 43 S. E. 121, 60 L. R. ▲. 63& See "^Sunday;* Dec 
Dig. {Key-Vo.y% 7; Cent. Dig. |{ H-tO. 

0« **Bj the word 'necessity' in the exception we are not to understand a 
physical and absolute necessity ; but a moral fitness or propriety of the work 
and labor done, under the circumstances of any particular case, may well be 
deemed necessity within the statute/* Flagg v. Inhabitants, 4 Gush. (Mass.) 
243. Ajid see Bums v. Moore, 76 Ala. 339, 52 Am. Rep. 332. The following 
contracts have beep held to be within the exceptions: Contract securing 
Indemnity from an absconding debtor pursued and overtaken on Sunday. 
Hooper v. Edwards, 18 Ala. 280. Repairing railroad tracks. Yonoskl y. 
State, 79 Ind. 393, 41 Am. Rep. 614. Ball bond. Hammons y. State, 59 Ala. 
164, 31 Am. Rep. 13. Repairing defect in highway. Flagg y. Inhabitants, 
supra. Shoeing horses used in carrying malL Nelson y. State, 25 Tex. App. 
599, 8 S. W. 927. Loading vessel where there is danger of navigation closing. 
McGatrick v. Wason, 4 Ohio St 566. Pumping oil well ; whether a work of 
necessity Is a question of fact Commonwealth y. Gillespie, 146 Pa. 546, 23 
Atl. 393. Transportation of cattle by a railroad company, so that it cannot 
excuse itself for delay on the ground that the delay was on Sunday. Phila- 
delphia, W. & B. R. Co. V. Lehman, 56 Md. 209, 40 Am. Rep. 415. Riding for 
exercise. Sullivan v. Railroad Co., 82 Me. 196, 19 Atl. 169, 8 L. R. A. 427. 
Telegram from husband to wife explaining absence. Burnett v. Telegraph 
Co., 39 Mo. App. 599. Telegram to physician. W. U. Tel. Co. v. Griffln, 1 
Ind. App. 46, 27 N. B. 113. Telegram announcing death of father. W. U. 
Tel. Ck>. V. WUson, 93 Ala. 32, 9 South. 414, 30 Am. St Rep. 23. Transaction 
of business by benefit association. Pepin v. Soci6t6, 24 R. I. 550, 54 Atl. 47, 
60 L. R. ▲. 626. The following have been held not within the exception: 
Note given to procure discharge of person arrested on charge of bastardy. 
Shippy V. Eastwood, 9 Ala. 198. Telegram respecting ordinary business af- 
fairs. W. U. Tel. Co. y. Topst (Ind.) 11 N. E. 16. Gathering a crop. Com. 
y. White, 190 Mass. 578, 77 N. B. 636. Publication and sale of newspaper. 
HANDY V. ST. PAUL GLOBE PUB. CO., 41 Minn. 188, 42 N. W. 872, 4 L. R. 
A. 466, 16 Am. St Rep. 695, Throckmorton Cas. Contracts, 227 ; Commonwealth 
V. Matthews, 12 Pa. Ca Ct R. 149, 22 Pittsb. Leg. J. (N. S.) 309; Id., 152 Pa. 
166, 25 Atl. 548, 18 L. R. A. 761. Ordinary sales or deliveries of ice or fresh 
meat State v. James, 81 S. a 197, 62 S. E. 214, 18 L. R. A. (N. S.) 617, 128 
Am. St Rep. 902, 16 Ann. Cas. 277 ; Arnhelter v. State, 115 Ga. 572, 41 S. B. 
989, 58 L. R. A. 392. Shaving and cutting or dressing hair by a barber. 
PhllUps y. Innes, 4 Clark & ^. 234 ; State v. Schuler (Ohio) 23 Wkly. Law 
Bui. 450; State v. Sopher, 25 Utah, 318, 71 Pac. 482, 60 L. R. A. 4G8, 95 
Am. St Rep. 845. But see, contra, Ungericht v. State, 119 Ind. 379, 21 N. E. 
1082, 12 Am. St Rep. 419; Stone v. Graves, 145 Mass. 353, 13 N. E. 906. 
Sale of meat by butcher. Tobacco is not within exception allowing sale of 
"drugs or medicines, provisions, or other articles of immediate necessity." 
State y. Ohmer, 34 Mo. App. 115. See "Sunday,*' Deo. Dig. (Key-No.) { 7; 
Vent. Dig. f§ H^O. 



§ 163) AGBEBMENTS IN VIOLATION OF POSITIYB LAW 331 

work may be done on Sunday to save it. If, however, the work is 
only to prevent loss on a secular day, as where a mill wheel is 
cleai\ed on Sunday because to do so on another day will make it 
necessary to shut down and stop work for the purpose, it is not- a 
work of necessity/* Nor is it sufficient to make a work one of 
necessity that it is profitable to those engaged in it and that it 
serves the convenience or tastes or wishes of the public generally.'* 
Any act connected with religious worship,'* or for the relief of 
suffering or distress,** is an act of charity, and may be performed 
on Sunday. 

Same — Incomplete Transactions 

The fact that negotiations are carried on, and the terms of a con- 
tract agreed upon, on Sunday, where the contract is not really 
made until a week day, does not render the contract illegal.** A 
promissory note, for instance, or a deed, thougfh written and signed 
on Sunday, is valid if delivered on Monday, since it do es not take 
effect unt il delivery ; ** and a sale of goods, though the negotiations 

iTMcGrath y. Merwin, 112 Mass. 467, 17 Am. Rep. 119. And see, to the 
same effect, Hamilton v. Austin, 62 N. H. 575. Contra, Hennersdorf y. Statei, 
26 Tex. App. 597, 8 ST. W. 92C, 8 Ajn. St Rep. 448. See **8undatf,'* Deo. Dig. 
{Key-No.) § 7; Cent. Dig. |{ 14-20. 

*• HANDY y. ST.- PAUL GLOBE PUB. CO., 41 Minn. 188, 42 N. W. 872, 
4 L. R. A. 466, 16 Am. St Rep. 695, Throckmorton Ca& Contracts, 227 (pub- 
lishing newspaper). See **Sundav,** Deo. Dig. (Key-No.) | 7; Cent. Dig. H 

»• Church subscriptions made on Sunday are enforceable, see Allen y. Duf- 
fle, 43 Mich. 1, 4 N. W. 427, 38 Am. Rep. 159; Bryan y. Watson, 127 Ind. 
42, 26 N. E. 6G6, 11 L. R. A. 63 ; Dale y. E:nepp, 98 Pa. 389, 38 Am. Rep. 165, 
note, 42 Am. Rep. 624; Hodges y. Nalty, 113 Wis. 567, 89 N. W. 535. But 
see Catlett y. Trustees, 62 Ind. 365, 30 Am. Rep. 197. Where a carriage is 
hired on Sunday, the contract is not made legal "because the hirer did a kind 
act by conveying a young lady home' who had been *to meeting' during the 
day.** TilloiCk y. Webb, 56 Me. 100. See "Sunday^* Deo. Dig. (Key-No.) | 
7; Cent. Dig. §S 14-20. 

•• Buck y. City of Biddeford, 82 Me. 433, 19 Atl. 912. See ''Sunday,'* Dec 
Dig. (Key-No.) { 7; Cent. Dig. ff 14-^0. 

•1 Taylor y. Young, 61 Wis. 314, 21 N. W. 408; McKfnnls y. Estes, 81 Iowa, 
749, 46 N. W. 987; Tuckerman y. Hinkey, 9 Allen (Mass.) 452; Dickinson y. 
Richmond, 97 Mass. 45 ; Love v. Wells, 25 Ind. 503, 87 Am. Dec. 375 ; Uhler 
y. Applegate, 26 Pa. 140; Beitenman's Appeal, 55 Pa. 183; Meriwether v. 
Smith, 44 Ga. 541 ; Bryant v. Booze, 55 Ga. 438 ; Tyler y. Waddington, 58 
Conn. 375, 20 Ati. 335, 8 L. R. A. 657 ; Merrill y. Downs, 41 N. H. 72 ; Stack- 
pole y. Symonds, 23 N. H. 229; Moseley y. Vanhooser, 6 Lea (Tenn.) 286, 40 
Am. Rep. 37 ; Butler y. Lee, 11 Ala. 885, 46 Anf. Dec. 230. That bill of sale 
is made on Sunday, in pursuance of sale made on previous day, does not in- 
validate sale. Foster y. Wooten, 67 Miss. 540, 7 South. 501. But see Han- 
chett y. Jordan, 43 Minn. 149, 45 N. W. 617. See "Sunday,'* Deo. Dig. (Key- 
No.) i 12; Cent. Dig. { S5. 

•s King y. Fleining, 72 111. 21, 22 Am. Rep. 131 ; Bell t. Mahin, 69 Iowa, 



332 LEGALITY OF OBJECT (Ch. 8 

are on Sunday, is valid if the goods are not set apart and delivered 
until Monday .•• 

Scmie — Ratification 

Whether a contract made on Sunday is capable of ratification is 
a question on which there is much conflict of authority. Upon 
principle, it seems that the contract, being void in its inception, 
is incapable of ratification, and many cases so hold.*^ There is a 
tendency, however, to avoid the hardship resulting from the in- 
validity of such contracts, and many cases declare that such con- 
tracts are capable of ratification.* ■ Where the contract is one of 
sale or exchange accompanied by actual delivery, there is author- 
ity to the effect that the property does not pass, and that the 
seller may maintain replevin** or trover; •' in which case it seems 

408, 29 N. W. 331 ; Hill ▼. Dunham, 7 Gray (Mass.) 543 ; Stacey v. Kemp, 97 
Mass. 166; Iiovejoy v. Whipple, 18 Vt. ,^79; 46 Am. Dec. 157; HUton v. 
Houghton, 35 Me. 143 ; GIbbs & Sterrett Mf;?. Oo. v. Brucker, 111 U. S. 597, 
4 Sup, Ct 572, 28 L. Ed. 534 ; Schwab v. Rigby, 38 Minn. 396, 38 N. W. 101 ; 
Dohoney v. Dohoney, 7 Bush (Ky.) 217; Beman v. Wessels, 53 Mich. 549, 19 
N. W. 179; WUson v. Winter (C. C.) 6 Fed. 16u So, where one of two part- 
ners executes an assignment on Sunday, but the other partner executes and 
delivers it on a secular day, the Instrument is valid. Farwell v. Webster, 71 
Wis. 486, 37 N. W. 437. See "Sunday;' Dec^ J>iff, (Key-No.) | 12; Cent Dig, 
I S5. 

•« Rosenblatt v. Townsley, 73 Mo. 536; Banks v. Werts, 13 Ind. 203. See 
*' Sunday,*' Dec. Dig. (Key-yo,) | 12; Cent. Dig. f S5. 

«* Day V. McAllister, 15 Gray (Mass.) 433; Allen v. Demlng, 14 N. H. 133, 
40 Am. Dec. 179 ; Winfleld v. Dodge, 45 Mich. 355, 7 N. W. 90C, 40 Am. Rep, 
476; THlock v. Webb, 56 Me. 100; Plaisted v. Palmer, 03 Me. 576; Kounta 
V. Price, 40 Miss. 341; Grant v. McGrath, 56 Conn. 333, 15 Atl. 370; Vina 
▼. Beatty, 61 Wis. 645, 21 N. W. 787 ; Riddle v. Keller, 61 N. J. Bq. 513, 48 
Atl. 818; Acme Electrical, etc., CJo. v. Van Derbeck, 127 Mich. 341, 86 N. W. 
786, 89 Am. St Rep. 476; Tennent-Stribling Shoe Co. v. Roper, 94 Fed. 739, 
36 C. C. A. 455. See "Sunday," Dec. Dig. (Key-No.) { 15; Cent. Dig. f 4^. 

«B Russell ▼. Murdock, 79 Iowa, 101, 44 N. W. 237, 18 Am. St Rep. 348; 
Kuhns V. Gates, 92 Ind. 66; Adams v. Gay, 19 Vt 358; Parker v. Pitts, 73 
Ind. 597, 38 Am. Rep. 155; Banks v. Werts, 13 Ind. 203; Gwinn v. Simes, 61 
Mo. 335: Wilson v. Milligan, 75 Mo. 41; Campbell v. Young, 9 Bush (Ky.) 
245 ; Williamson v. Brandenberg, 6 Ind. App.^ 97, 32 N. E. 1022 ; Sumner v. 
Jones, 24 Vt 317 ; Flinn v. St John, 51 Vt 334 ; Schmidt v. Thomas, 75 Wis. 
529, 44 N. W. 771 ; Van Hoven v. Irish (0. O.) 10 Fed. 13, 3 McCrary, 443 ; 
Cook T. Forker, 193 Pa. 461, 44 Atl. 560, 74 Am. St Rep. 699. See "Sunday," 
Dec. Dig. (Key-No.) fi 15; Cent. Dig. f 46. 

••Tucker v. Mowray, 12 Mich. 378; Winfleld v. Dodge, 45 Mich. 355, 7 N. 
W. 906, 40 Am. Rep. 476. See, also, Magee t. Scott, 9 Cush. (Mass.) 148, 55 

•T JLadd V. Rogers, 11 Allen (Mass.) 209. See, also, Myers v. Meinrath, 101 
Mass. 366, 369, 3 Am. Rep. 368; Hall v. Corcoran, 107 Mass. 251, 9 Am. Rep. 
80; Oranson v. Goss, 107 Mass. 439, 441, 9 Am. Rep. 45w See "Sunday," Dec, 
Dig. (Key-No.) % IS; Cent. Dig. { ^6. 



4153) , - AGBEEMENTS IN VIOLATION OF POSITIVE LAW 333 

that a sufficient consideration for a new promise to pay may be 
found in the consent of the seller to the transfer of the property 
at the time of such promise ; the liability of the promisor resting, 
however, upon a new contract, and not upon the ratification of 
the original contract.* ■ So, if a sale is made on Sunday, but 
the goods are not delivered until a week day, the buyer is liable, 
not upon the original promise, but upon an implied promise to pay 
for the goods.** A contract for the performance ^on_Sunday of 
work forbiddeij by law majy^ot be ratified, because the very object 
of the contract is a vi o lation of law .^* A contract made on a 
previous day cannot be rescinded on Sunday.^* 

Usury 

At common law a man c ould contract for and recover any 
amount of interest for a loan of money that the borrow er migh t 
be willing; to give ; but, to protect persons in necessity against 
unconscionable exactions, usury laws have been enacted in most 
of the states, prescribing a legal rate of interest. 

In some states the contract in which ^ usury is charged is de- 
Am. Dec 49. Contra, Smith y. Bean, 15 N. H. 577, 578; Kinney t. McDer- 
mott, 55 Iowa, 674, 8 N. W. 656, 39 Am. Rep. 191. See, also, Simpson y, 
Nichols, 8 M. & W. 244, as corrected In 5 M. & W. 702 (questioning WllUams 
y. Paul, 6 Blng. 653). See "Sunday," Dec Dig, (Kev^o,) | 15; Cent. Dig. 

••Winfleld y. Dodge, 45 Mich. 855, 7 N. W. 906, 40 Am. Rep. 476; Haacke 
y. Knights of dberty, 76 Md. 429, 25 AtL 422 ; Brewster y. Banta, 66 N. J. 
Law, 367, 49 Atl. 718. An action may be maintained on a new promise. 
Williams y. Paul, 6 Blng. 663; Harrison y. Oolton, 31 Iowa, 16; Melcholr y. 
McCarty, 81 Wis. 252, 11 Am. Rep. 606. See WincheU y. Gary, 116 Mass. 560, 
15 Am. Rep. 151. Ck)ntra, Bontelle y. Melendy, 19 N. H. 196, 49 Am. Dec.* 
152; Kountz y. Price, 40 Miss. 841. See "^Sunday,*' Dea Dig. (Kev-No.) { 
15; Cent. Dig. i J^6. 

••Bradley y. Rea, 14 Allen (Mass.) 20: Id., 103 Mass. 18S, 4 Am. Rep. 
624; Hopkins y. Stefan, 77 Wis. 45, 45 N. W. 676; Flynn y. Columbus Club, 
21 R. I. 634^ 45 Ati. 551 ; Bollin y. Hooper, 86 Mich. 287, 86 N. W. 795. The 
deUyery must be accompanied by circumstances showing new contract As- 
pell y. Hosbein, 98 Biich. 117, 57 N. W. 27. Defendant, who was Indebted to 
plaintiff, agreed on Sunday to furnish a laborer on Monday to help plaintiff's 
son thresh, on plaintiff's account, which he did, and the son paid plaintiff a 
sum, which the latter placed to defendant's credit Held, that tiie transac- 
tion on Monday did not show the elements of a contract wlUiout relying on 
the Sunday transaction, and hence was not sufficient to take the account out 
of the statute of limitations. PlUen y. Erlckson, 125 Mich. 68, 83 N. W. 1023. 
Bee "Sunday,*' Dec. Dig. (Key-No.) | 15; Cent Dig. { J^6. 

»o HANDY y. ST. PAUL GLOBE PUB. CO., 41 Minn. 188, 42 N. W. 872, 
4 L. R A. 466, 16 Am. St Rep. 695, Throckmorton Cas. Contracts, 227. See 
''Sunday,** Dec. Dig. (Key-No.) f 15; Cent. Dig. | J^6. 

Ti Benedict y. Batchelder, 24 Mich. 425, 9 Am. Rep. 130. See "Sunday,** 
Dee. Dig. (Key-No.) | 15; Cent. Dig. | 4tf. 



334 LEGALITY OF OBJECT (Ch. 8 

clarcd void. In many states the contract is not void, but the 
entire interest is forfeited. In other states only tlie excess of 
interest charged is forfeited; the legal amount is nevertheless 
recoverable. 

Four requisites are necessary to constitute an usurious trans- 
action: (1) A loan or forbearance of money; (2) An under- 
st anding that the money lent is to be returned ; (3) The pay - 
ment_ojf,^o^ agreemen t t o p ay^ a g.reater Jia te of interest than is 
allowed by law; (4J A corrupt intent to take more than the 
le ga l rate for^he^use of the sum loaned.^* 

Same — Loan of Money 

In tte first place, there must be a lending and borrowing of mon- 
ey. If it is so understood by the parties, no shifting or contrivance 
for the purpose of disguising the real nature of the transaction can 
avail to evade the statute ; and, on the other hand, if it was not a 
borrowing and lending, it cannot be brought within the statute.'* 
The parties to a contract, for instance, may agree on a sum as stip- 
ulated damages in case of^breach, and it may be recovered, though it 
exceeds the legal interest on the value of property which should 
have been paid.'* So, also, on a loan of chattels, the agreed com- 

■ • 

T> Lloyd ▼. Scott, 4 Pet 205, 7 L. Ed. 833; Balfour v. Davis, 14 Or. 47, 
12 Pac. 80. Bee ^'Uaury;* Dec. Dig. {Key-No.) |f 1, ll-lS; Cent. Dig. f| 1, 
2S-29. 

T» Tyson v. Rlckard, 3 Har. & J. (Md.) 100, 6 Am. Dec. 424; Price y. 
Campbell, 2 Gall (Ya.) 110, 1 Am. Dec. 535 ; Ferguson v. Sutphen, 3 Gllman 
(111.) 547; Osbom y. McCowen, 25 lU. 218; Struthers y. Drezel, 122 U. S. 
487, 7 Sup. Ct 1293, 30 L. Ed. 1216 ; Galther y. Clarke, 67 Md. 18, 8 Ati. 740 ; 
Hartranft y. Uhlinger, 115 Pa. 270, 8 Atl. 244 ; Luken» y. Hazlett, 37 Minn. 
441, 85 N. W. 265; Pope v. Marshall, 78 Ga. 635, 4 S. E. 116; Drury y. 
Wolfe, 34 III. App. 23; Id., 134 111. 201, 25 N. E. 626. Money paid aboye tbe 
legal rate for the forbearance of an existing debt is usury. Hathaway y. 
Hagan, 59 Vt 75, 8 Atl. 678. Charging "banker's commission.'' Bowdoln y. 
Hammond, 70 Md. 173, 28 Atl. 760. An agreement by which a party lends 
bonds and the borrower agrees to pay to the owner the Interest paid by the 
government, and 6 per cent In addition, Is not a contract for the loan of 
money. Marshall y. Rice, 85 Tenn. 502, 3 S. W. 177. Loans' by building and 
loan assodatloil. Jackson v. Cassidy, 68 Tex. 282, 4 S. W. 541 ; Tllley y. As- 
sociation (C. C.) 52 Fed. 618; Succession of Latchford, 42 La. Ann. 520, 7 
South. 628; Hensel y. Association, 85 Tex. 215, 20 S. W. 116; International 
Bldg. & Loan Ass'n v. Abbott, 85 Tex. 220. 20 S. W. 118 ; Sullivan y. Asso- 
ciation, 70 Miss. 04, 12 South. 590; Reeve v. Association, 56 Ark. 335, 10 S. 
W. 017, 18 L. R. A. 120; Iowa Savings & Loan Ass'n y. Heidt, 107 Iowa, 
297, 77 N. W. 1050, 43 L. R. A, 689, 70 Am. St Rep. 197 ; Washington Nat 
Building, Loan & Investment Ass'n y. Stanley, 38 Or. 319, 63 Pac. 489, 58 
L. R. A. 816, 84 Am. St Rep. 793. See "Usury^' Deo. Dig. {Key-No.) | IS; 
Cent. Dig. { 25. 

r4Tardeveau y. Smith's Ex'r, Hardin (Ey.) 175, 8 Am. Dec. 727; Black- 



§ 153) AOBBEMBMTS IN VIOLATION OF POSITTVE LAW 335 

pensation may be recovered, though it exceeds what would be the 
legal rate of interest on the value of the chattel.''" In neither of 
these cases is there a loan or forbearance of money/* As alread y 
said, howeve r, the contract must be made bona. fide^. and not asja 
cover for a loan. ^^ 

A negotiable note which has been executed and delivered is treat- 
ed as a chattel, and it is not usury for a third person to buy it from 
the holder at a discount greater than the legal rate of interest.^* An 
exception is made to this rule in some jurisdictions if the transferror 
indorses the note and thus makes himself conditionally liable for its 
payment;** but on principle and by the weight of authority such 
indorsement is regarded as a warranty of title and the transaction 

bum V. Hayes, 69 Ark. 366, 27 S. W. 240. Bee **U9ury,** Deo, Dig, (Key-yo.) 
§ IS; Cent. Dig. % 25. 

»* Hall V. Haggart, 17 Wend. (N. Y.) 280; BuU v. Rice, 6 N. Y. 315. Bee 
"Usury,'' Dec. Dig. {Key-'So.) f IS; Cent. Dig, % 25. 

T« See, also, Truby v. Mosgrove, 118 Pa. 88, 11 Atl. 806, 4 Am. St Rep. 
575; Appeal of Trine (Pa.) 13 Atl. 7G5; Union Gent Life Ins. Co. y. Hil-. 
liard, 63 Ohio St 478, 58 N. B. 231, 53 L. R. A. 462, 81 Am. St Rep. 644. If 
a person sells chattels or land on credit, the fact that he charged a larger . 
sum than he would have charged if he had sold for cash does not render the 
transaction usurioua Bull v. Rice, 5 N. Y. 316; Brooks y. Avery, 4 N. Y. 
225; Gilmore v. Ferguson, 28 Iowa, 220; Swayne v. Riddle, 87 W. Va. 281, 
16 S. B. 512; Brown v. Gardner, 4 Lea (Tenn.) 145; Graeme v. Adams, 23 
Grat (Va.) 225, 14 Am. Rep. 130; Wheeler y. Marchbanks, 32 S. C. 584, 10 
S. B. 1011 ; Bass y. Patterson, 68 Miss. 810, 8 South. 848, 24 Am. St Rep. 
278. Contra, Fisher* v. Hoover, 3 Tex. Civ. App. 81, 21 S. W. 830. Where on 
a purchase of land the vendee agrees to pay, as part of the price, on deferred 
payments in excess of the legal rate, the contract is not usurious. Askin v. . 
Lebus (Ky.) 4 S. W. 306 ; Reger v. O'Neal, 33 W. Va. 158, 10 S. B. 375, 6 
L. R. A. 427; Dykes y. Bottoms, 101 Ala. 380, 13 South. 582. For other 
cases in which it has been held that the relation of borrower and lender did 
not exist, see Appeal of Donehoo (Pa.) 15 Atl. 824; Kiebuhr y. Schreyer 
(Com. PL) 13 N. Y. Supp. 808; McComb v. Association, 134 N. Y. 588, 31 
N. B. 613 ; Duval y. Neal, 70 Miss. 288, 12 South. 145 ; Eddy's Ex'r v. North- 
up (Ky.) 23 S. W. 853. Sale or loan. Ellenbogen v. Griffey, 55 Ark. 268, 
18 S. W. 126. Bee '*Usury,** Dec. Dig. {Key-No.) f IS; Cent. Dig. | 25. 

TT Lloyd V. Scott, 4 Pet 205, 7 L. Ed. 833. See *'Usury,'' Dec. Dig. (Key- 
No.) i IS; Cent, Dig. ^ 25. 

vs Lloyd V. Keach, 2 Conn. 175, 7 Am. Dec. 256 ; Nichols v. Fearson, 7 Pet 
103, 8 L. Ed. 623; Munn v. Commission Ck>., 15 Johns. (N. Y.) 44, 8 Am. Dec. 
218; Cram v. Hendricks, 7 Wend. (N. Y.) 568; Jackson v. Travis, 42 Minn. 
438^ 44 N. W. 316; Holmes v. Bank, 53 Minn. 350, 55 N. W. 555; Claflin v. 
Boorum, 122 N. Y. 385, 25 N. B. 360; Chase Nat Bank v. Faurot 72 Hun, 
373» 25 N. Y, Supp. 447; Rodecker v. Llttauer, 58 Fed. 857, 8 C. 0. A. 320. 
See ''UMury,** Dec Dig. (Key-No.) { 26; Cent. Dig. || 57, 58, 62. 

T* Bank of Radford v. Kirby, 100 Va. 488, 42 S. B. 303 ; Sedbury v. Duffy, 
ins N. C. 432, 74 S. B. 355. Bee **U9ury," Dec. Dig. (Key-No.) { 26; Cent, 
Dig. ii 57, 68, 62. 



336 LEOALITT OF OBJECT (Ch. 8 

as a sale rather than a loan.** If the note was originally made for 
accommodation, and the first person giving value for it takes it at a 
rate of discount greater than the legal rate and with knowledge that 
it is accommodation paper, this constitutes usury, for it is a mere 
loan, and not the sale of a subsisting instrument ; •* and some courts 
have held such transactions usurious, even when the transferee of 
the note takes it without knowledge of its accommodation charac- 
ter ; •* but by the better opinion this is not usury, for there is no in- 
tention to lend, but only an intention to buy an instrument believ- 
ed to be already valid and subsisting.** 

The sale below par of the bonds of a corporation bearing the high- 
est legal rate of interest is in reality a borrowing of money by the 
corporation at a higher rate than that prescribed by law, and in the 
absence of a special statute relating to corporations such transac- 
tions have usually been held usurious.** By statutes in some states , 
however, corporations are given the power to borrow money by the 
sale of bonds at a rate of interest higher than the legal rat e pre - 
scribed for private persons ; ** and in other jurisdictions it is held 
that such sales are not usurious because by common commercial 
custom corporate bonds are regarded as chattels and their issue to a 
purchaser is treated as a sale of a subsisting security rather than 
a borrowing of money.** 

Same — Principal Absolutely Repayable 

A loan being essenti^^Ljo.^uyjryj the contract musj; cont emplate 
the absolute repayment of ^ the principal* Thus; where a loan is 

•0 Becker's Invefitment Agency y. Eea, 63 Minn. 459/ 65 N. W. 028 (stating 
different views) ; Durant ▼. Banta, 27 N. J. Law, 624. See **U9ury," Deo. 
Dig. [Key-No.) { B6; Cent. Dig. §§ 57, 58. 6$. 

•1 Richardson v. Scobee, 10 B. Mon, (Ky.) 12; Newell v. Doty, 33 N. Y. 
83. See "Usury," Deo. Dig. (Key-No.) { 26; Cent. Dig. H 57. 58, 6t. 

82 Sylvester v. Swan, 5 Allen (Mass.) 134, 81 Am. Dec. 734; Claflln v. 
Boorum, 122 N. Y. 385. 25 N. E. 3G0. See '*U9ury," Deo. Dig. (Key-No.) | 
$6; Cent. Dig. {| 57, 58. 6B. 

••Dlckerman v. Day, 31 Iowa, 444. 7 Am. Rep. 156; Sherman v. Black- 
man, 24 IlL 345; Law's Ex'rs v. Sutherland. 5 Grat (Va.) 357; Holmes y. 
State Bank of Duluth, 53 Minn. 350. 55 N. W. 555. See "U9ury,*' Deo. Dig. 
(Key-No.) | 26; Cent. Dig. §§ 57, 58, 62. 

84 Danville v. Sutherlin, 20 Grat (Va.) 555; Geo. N. Fletcher & Sons v. 
Alpena Circnit Judge, 136 Mich. 511, 99 N. W. 748; Houghteling v. Lumber 
Co., 165 Mich. 498, 131 N. W. 109, 35 L. R. A. (N. S.) 1106. See **Vaury," 
Deo. Dig. (Key-No.) § 26; Cent. Dig. §§ 57, 58, 62. 

88 Gamble v. Queens County Water Co., 123 N. Y. 91, 25 N. B. 201, 9 L. R 
A. 527; Clearwater County State Bank v. Bagley-Ogema Telephone Co., 116 
Minn. 4, 133 N. W. 91, 36 L. R. A. (N. S.) 1132. Ann. Cas. 1913A, 622. See 
*' Usury;* Deo. Dig. (Key-No.) §i 25, 26; Cent. Dig. U 55^2. 

88 Memphis v. Bethel (Tenn.) 17 S. W. 191; Griffith v. Burden, 35 Iowa, 
143. See "Usury;' Deo. Dig. (Key-No.) §§ 25, 26; Cent. Dig. |§ 55-62. 



6 153) AOBBBMBNTS IN VIOLATION OF POSITIVE LAW 837 

made, to be returned at a fixed diy, with more than the legal rate of 
interest, depending oh a casualty which hazards both principal and 
interest, the contract is not usurious ;. but where the interest, only,, 
is hazarded, it is usury.** 

Same — Contract for More Than Legal Rate of Interest 

The interest paid or agre e d to be paid m ust be^at a rate highe r 
than the legal rate . Thus, if a person agrees to pay a specific sum, 
exceeding the lawful interest, provided he does not pay the principa! 
by a day certain, it is not usury, since by a punctual payment of the 
principal he may avoid the payment of the sum stated, which is con- 
sidered as a penalty.** 

As to whether it is usury to charge compound interest— that is^ 
in teres t upon ov erdue interest — the decisions are conflicting, but ac- 
cording to the weight of authority it is not so regarded ; but interest 
cannot be charged on interest not due.** It is not usury to provide 

»» Lloyd T. Scott, 4 Pet 205, 7 L. Ed. 833; Truby v. Mosgrove. U8 Pa. 89^ 
11 Atl. 806, 4 Am. St Rep. 575 ; Thorndike t. Stone, 11 Pick. (Mass.) 183 ; 
Wilson ▼. Kllburn, 1 J. J. Marsh. (Ky.) 494; Spencer y. Tilden, 5 Cow. (N. 
Y.) 144; Heist v. Blalsdell, 198 Pa. 377. 48 Aa 259. See '*U8ury," Deo. Dig. 
(Key-No,) f{ 57-41; Cent. Dig. §§ 92-05. 

•» Lloyd V. Scott, 4 Pet 205, 7 L. Ed. 833 ; BLAKE t. YOUNT, 42 Wash. 
101, 84 Pac 625, 114 Am. St Rep. 106, 7 Ann. Cas. 487, Throckmorton Gas. 
Contracts, 230; Gambril ▼. Doe, 8 Blackf. (Ind.) 140, 44 Am. Dec. 760; Fish- 
er T. Anderson, 25 Iowa, 28, 95 Am. Dec. 761 ; Rlghter v. Warehouse Co., 99 
Pa. 289 ; McNalry t. Bell, 1 Yerg. (Tenn.) 502, 24 Am. Dec. 454 ; Walker v. 
Abt, 83 111. 226 ; Ramsey v. Morrison, 39 N. J. Law, 591 ; Conrad v. Gibbon,. 
29 Iowa, 120; Hackenberry y. Shaw, 11 Ind. 892; Roarers v. Sample, 33 Miss. 
810, 69 Am. Dec. 849. Bat see Carroll Co. Sav. Bank v. Strother, 28 S. C. 
504, 6 S. B. 313; Connecticut Mat Life Ins. Co. v. Westerhoff, 58 Neb. 379,. 
78 N. W. 724, 79 N. W. 731. 76 Am. St Rep. 101 ; Unton v. Insarance Co., 
104 Fed. 584, 44 C. a A. G4. Bee ''Usury;* Deo. Dig. (Key-No.) §| S7-41; 
Cent. Dig. it 9B-95. 

»» BLAKE V. YOUNT, 42 Wash. 101, 84 Pac. 625, 114 Am. St Rep. 106, 7 
Ann, Cas. 487, Throckmorton Cas. Contracts, 230; Stewart v. Petree, 55 N. 
Y. 621, 14 Am. Rep. 352; Culver v. Blgelow, 43 Vt 249; Qulmby v. Cook, 
10 Allen (Mass.) 32; Merck v. Mortgage Co., 79 Ga. 213, 7 S. E. 265; Austin 
V. Bacon, 28 Wis. 416; Taylor v. Hlestand, 46 Ohio St 345, 20 N. E. 343; 
Gllmore v. Bissell, 124 111. 488, 16 N. E. 925; Brown v. Vandyke, 8 N. J. Eg. 
795, 55 Am. Dec. 250; Kelser v. Decker, 29 Neb. 92, 45 N. W. 272: Telford 
T. Garrels, 132 111. 550, 24 N. E. 573 ; Hale v. Hale, 1 Cold. (Tenn.) 233, 78 
Am. Dea 490; Ginn v. Security Ck).. 92 Ala, 135, 8 South. 388; Brown v. 
Bank, 86 Iowa, 527, 53 N. W. 410. See, for distinctions. Cox v. Brookshlre, 
76 N. C. 314; Simpson v. Evans, 44 Minn. 419, 46 N. W. 908; Klmbrough v. 
Luklns, 70 Ind. 373; Drury v. Wolfe, 134 111. 294, 25 N. E. 626; Leonard v. 
Patton, 106 111. 99 ; Mathews v. Toogood, 23 Neb. 530, 37 N. W. 265. 8 Am. 
St Bep. 131; Hochmark v. Rlchler, 16 Colo. 2t'>3, 26 Pac. 818; Young v. IIlll, 
67 N. Y. 162, 23 Am. Rep. 99 ; Palm v. Fancher, 93 Miss. 785, 48 South. 818, 
83 L. R. A. (N. S.) 205. In some jurisdictions, however, the courts have 
refused to allow recovery of Interest on Interest, on the ground that It sa- 

Clabk Cont.(3d Ed.)— 22 



338 LEGALITY OF OBJBCT (Ch. 8 

for payment of an attorney's fee if the debt has to be collected by 
suit ; •• nor to require payment in advance of the highest legal 
rate ; •* nor, under some circumstances, to pay a broker a commis- 
sion, or for expenses, for procuring the loan,** provided, as in other 

vored of nsury, and was contrary to the policy of the law. Bee Bowman y. 
Neely, 151 IlL 87, 37 N. B. 840 ; Wilcox t. Howland, 23 Pick. (Masa) 167 ; 
Henry v. Flagg, IS Mete. (Mass.) 64; Ck>x v. Smith, 1 Nev. 161, 90 Am. Dec. 
476; Young ▼..HUl, 67 N. Y. 162, 23 Am. Rep. 09. Bee ^'Utury," Dee. Dig. 
(KeV'Vo.) i IfO; Cent. Dig. §{ 109-106. 

•0 Weatherby v. Smith, 30 Iowa, 131, 6 Am. Rep. 663 ; Dorsey y. Wolff, 142 
111. 589, 32 N. B. 495, 18 L. R. A. 428, 34 Am. St Rep. 99 ; Williams y. Flow- 
ers, 90 Ala. 186, 7 South. 489, 24 Am. St Rep. 772; Merck y. Mortgage Co., 
79 Gk. 213, 7 S. B. 265; Smith y. SUyers, 32 Ind. 321; First Nat Bank y. 
Canatsey, 84 Ind. 149; National Bank of Athens y. Danforth, 80 Ga. 55, 7 
S. B. 546; Shelton y. Aultman & Taylor Ck>., 82 Ala. 315, 8 South. 232; Fow- 
ler y. Trust Co., 141 U. S. 411, 12 Sup. Ct 8, 35 L. Bd. 794. Otherwise by 
statute in some states. Bee "Usury,'* Deo. Dig. (Key-No.) | 62; Cent. Dig. 
i 155. 

•1 Parker y. Cousins, 2 Grat (Va.) 872, 44 Am. Dec. 388; Telford y. Gar- 
rels, 132 lU. 550, 24 N. B. 573; Meyer y. Muscatine, 1 Wall. 384, 17 L. Bd. 
564 ; Yahlberg y. Keaton, 51 Ark. 634, 11 S. W. 878, 4 L. R. A. 462, 14 Am. 
St Rep. 73; Goodrich y. Reynolds, 31 111. 490, 83 Am. Dec. 240; Fowler y. 
Trust Co., 141 U. S. 884, 12 Sup. Ct 1, 35 L. Bd. 786 ; Bnglish y. Smock, 34 
Ind. 115, 7 Am. Rep. 215; Newell y. Bank, 12 Bush (Ky.) 57; Rose y. Mun- 
ford, 36 Neb. 148, 54 N. W. 129; Hawks y. Weaver, 46 Barb. (N. Y.) 164; 
Mackenzie y. Flannery, 90 Ga. 590, 16 & B. 710. Bee **U8wv,** Dec. Dig. 
{KeV'Vo.) it ^5, k6; Cent. Dig. §§ S8, 9P. 

•» Suydam v. Westfall, 4 Hill (N. Y.) 211 ; Matthews y. Coe, 70 N. Y. 239, 
26 Am. Rep. 583 ; Merck y. Mortgage Co., 79 Ga. 213, 7 S. B. 265 ; Boardman 
y. Taylor, 66 Ga. 638 ; Haldeman y. Insurance Co., 120 III. 390, 11 N. B. 526 ; 
New Bngland Mortgage Security Co. y. Gay (C. O.) 33 Fed. 636; Thomas y. 
Miller, 39 Minn. 339, 40 N. W. 358 ; Baird y. Millwood, 51 Ark. 548, 11 S. W. 
881; Cockle y. Flack, 93 U. S. 344, 33 L. Bd. 949; Pass y. Security Co., 66 
Miss. 365, 6 South. 239 ; Hughes y. Griswold, 82 Ga. 299, 9 S. B. 1092 ; Hall 
y. Daggett, 6 Cow. (N. Y.) 653; Nourse y. Prime, 7 Johns. Ch. (N. Y.) 69, 11 
Am. Dec. 408 ; Telford y. Garrels, 132 111. 550, 24 N. B. 573 ; Ginn y. Security 
Co., 92 Ala. 135, 8 South. 388; White y. Dwyer, 31 N. J. Bq. 40; Davis v. 
Sloman, 27 Neb. 877, 44 N. W. 41 ; Weems v. Jones, 86 Ga. 760, 13 S. B. 89. 
Even the lender, it has been held, may charge for extra services and ex- 
penses, for, to constitute usury, the charge must be for the loan or forbear- 
ance. Atlanta Mining & Rolling Mill Co. y. Gwyer, 48 Ga. 9; Morton y. 
Thurber, 85 N. Y. 550; Ammondson y. Ryan, 111 111. 506; De Forest y. 
Strong, 8 Conn. 513; Dayton y. Moore, 30 N. J. Eq. 543; Daley y. Invest- 
ment Co., 43 Minn. 517, 45 N. W. 1100 ; Swanstrom v. Balstad, 51 Minn. 276, 
53 N. W. 648 ; Iowa Savings & Loan Ass'n y. Heidt, 107 Iowa, 297, 77 N. W. 
1050, 43 L. R. A. 689, 70 Am. St Rep. 197. But see Jackson v. May, 28 111. 
App. 305. But if the lender exacts a bonus in addition to interest at legal 
rate, it is usury. Fanning y. Dunham, 5 Johns. Ch. (N. Y.) 122, 9 Am. Dec 
283 ; Hewitt v. Dement, 57 IlL 500 ; Walter v. Foutz, 52 Md, 147 ; Harris 
V. Wicks, 28 Wis. 198; Stark y. Sperry, 6 Lea (Tenn.) 411, 40 Am. Rep. 47; 
Rowland y. Bull, 6 B. Mon. (Ky.) 146. But exacting bonus or commission 



§ 153) AQBEEMENTS IN VIOLATION OF POSITIVE LAW 839 

cases, it is not a cover for a usurious transaction.** It has bee n 
held that it is usury to dela^^jj^ment of the money lo^nedr and ex » 
a ct interest fo r thejull time.** 

Same — Unlawful Intent 

There must be an intention to charge and pay the illegal rate.** 
Ignorance of the law will not protect a party from the penalties of 
usury where it is committed ; but where there was no intention to 
evade the law, and the facts which would otherysrise constitute usury 
can be shown to be the result of mistake or accident, no penalty 

by agent as condition of making loan at legal interest for Ills principal, witbr 
out knowledge or consent of the latter, does not constitute nsury in the prin- 
cipaL StlUman t. Northrup, 109 N. Y. 473, 17 N. B. 379; New England Mort- 
gage Security Co. ▼. Townes (Miss.) 1 South. 242; Acheson t. Chase, 28- 
Minn. 211, 9 N. W. 734; BalUnge